Even though the states have borrowed heavily from the market, bond issuances at the weekly auction on Tuesday rose sharply by 42% and the average prices came down by 7 basis points to a three-week low of 7.61%.
Twelve states have raised Rs 20,300 crore through state government securities on Tuesday, which is a sharp 42% increase on-year, though the amount raised is 23% lower than what was indicated for the week in the auction calendar.
Accordingly, the weighted average cut-off eased considerably by 7 basis points to 7.61%, which is a three-week low, despite the weighted average tenor remaining stable at 15 years, according to a note by ICRA Ltd.
The spread between the 10-year state bonds and the new G-sec stood at 38 basis points on Tuesday, while the same between the 10-year state bonds and old G-sec rose a notch to 34 basis points from 33 basis points last week. This had the yield curve remaining inverted at the longer end, the agency said.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
