What Just Happened?
The RBI released a press note on March 21, 2026, announcing that 22 state governments and union territories plan to raise a combined ₹57,408 crore through an auction of State Government Securities (also called State Development Loans or SDLs). The auction takes place on March 24, 2026 (Tuesday) through the RBI's E Kuber system.
This is one of the larger weekly SDL auctions and gives NRI investors a chance to lock in yields on sovereign backed paper across a wide range of maturities.
Which States Are Borrowing and How Much?
Here is a breakdown of the borrowing plans by state:
| State/UT | Total Amount (₹ Crore) | Tenors | Auction Type | |---|---|---|---| | Andhra Pradesh | 3,900 | 17, 20, 25 years | Yield | | Assam | 500 | Re issue of 7.22% SGS 2032 | Price | | Goa | 100 | 12 years | Yield | | Gujarat | 2,000 (+ ₹1,000 Greenshoe) | 7.5, 8.5 years | Yield | | Haryana | 2,000 | 6, 13 years | Yield | | Himachal Pradesh | 565 | 15 years | Yield | | Jammu and Kashmir | 1,262 | 25 years | Yield | | Jharkhand | 3,000 | Re issues of 7.20% SGS 2032, 7.33% SGS 2034, 7.49% SGS 2036 | Price | | Karnataka | 10,000 | 5, 8, 10.5, 11.5, 15 years | Yield | | Kerala | 3,700 | 5, 10, 20 years | Yield | | Maharashtra | 2,530 (+ ₹1,000 Greenshoe) | 10 years, Re issues of 7.66% SGS 2047 and 7.66% SGS 2052 | Yield/Price | | Manipur | 350 | 13 years | Yield | | Meghalaya | 253 | 9 years | Yield | | Nagaland | 600 | 5 years | Yield | | Puducherry | 150 | 9 years | Yield | | Punjab | 1,598 | 10 years | Yield | | Rajasthan | 5,000 | 5, 10 years, Re issue of 7.65% SGS 2040 | Yield | | Sikkim | 400 | 10 years | Yield | | Tamil Nadu | 7,000 | 5, 9, 10 years, Re issues of 7.28% SGS 2033 and 7.63% SGS 2056 | Yield/Price | | Uttar Pradesh | 5,500 | Re issues of 7.57% SGS 2038, 7.51% SGS 2039, 7.59% SGS 2041, plus 20 and 25 year fresh issues | Price/Yield | | Uttarakhand | 2,000 | 9, 20 years | Yield | | West Bengal | 5,000 | 18, 21, 25 years | Yield |
Karnataka is the single largest borrower at ₹10,000 crore, followed by Tamil Nadu at ₹7,000 crore and Uttar Pradesh at ₹5,500 crore.
Gujarat and Maharashtra also have greenshoe (additional borrowing) options of ₹1,000 crore each, which means the total could go even higher if those options get exercised.
Fresh Issues vs Re Issues: What Is the Difference?
Some states are issuing brand new securities (fresh issues) where the coupon rate gets determined at auction through yield based bidding. Others are re issuing existing securities at known coupon rates through price based bidding.
For example, Jharkhand is re issuing its 7.20% SGS 2032, 7.33% SGS 2034, and 7.49% SGS 2036. If you bid on these, you already know the coupon rate. You bid a price, and the effective yield depends on whether you pay above or below face value.
For fresh yield based auctions, the RBI determines the cut off yield, and the coupon rate gets set accordingly.
How Can NRIs Participate?
NRI investors can participate through the non competitive bidding facility via the RBI Retail Direct portal at [https://rbiretaildirect.org.in](https://rbiretaildirect.org.in).
Here are the key participation details:
- Non competitive bidding window: 10:30 AM to 11:00 AM on March 24, 2026
- Competitive bidding window: 10:30 AM to 11:30 AM on March 24, 2026
- Minimum investment: ₹10,000 (face value)
- Multiples: ₹10,000 thereafter
- Non competitive allocation: Up to 10% of the notified amount of each stock, with a maximum of 1% per single bid per stock
- Results announcement: March 24, 2026 (Tuesday)
- Payment date: March 25, 2026 (Wednesday)
Eligibility Reminder for NRIs
NRIs who hold an NRO or NRE account with a bank in India and have registered on the RBI Retail Direct platform can place bids. Make sure your Retail Direct Gilt account is active and linked before the auction date. If you have not yet registered, visit the Retail Direct portal and complete the process well in advance.
Why Should NRI Investors Care About SDLs?
1. Sovereign Backing with a Yield Premium
State Government Securities carry the implicit backing of the respective state government and are governed by the Government Securities Act, 2006 and the Government Securities Regulations, 2007. Historically, SDLs offer a yield spread of 25 to 75 basis points over comparable central government securities, making them attractive for investors seeking slightly higher returns without moving to corporate credit risk.
2. SLR Eligibility and Liquidity
These stocks qualify as eligible investments for Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. They also qualify for the ready forward (repo) facility. This means banks and financial institutions actively trade these securities, which supports secondary market liquidity.
3. Half Yearly Interest Payments
For fresh issues, interest gets paid on September 25 and March 25 every year until maturity. For re issued stocks, the coupon rate stays the same as the original issue, and interest continues on the same half yearly schedule.
4. Portfolio Diversification
For NRIs building a rupee denominated fixed income portfolio, SDLs offer geographic diversification across Indian states. You can pick states and tenors that match your investment horizon and risk appetite.
Impact on the Broader Bond Market
A ₹57,408 crore SDL supply in a single week is significant. Large SDL auctions can put upward pressure on state bond yields, especially at the longer end of the curve. States like West Bengal (borrowing across 18, 21, and 25 year tenors), Andhra Pradesh (17, 20, 25 years), and Jammu and Kashmir (25 years) are tapping the ultra long end, which could influence the yield curve.
For NRIs invested in Indian debt mutual funds, gilt funds, or dynamic bond funds, heavy SDL supply weeks can cause mark to market fluctuations in NAVs. Fund managers who hold SDLs may see short term price pressure, though this typically normalizes as the market absorbs the supply.
Key Dates at a Glance
| Event | Date | |---|---| | RBI Announcement | March 21, 2026 (Saturday) | | Auction Day | March 24, 2026 (Tuesday) | | Results Announcement | March 24, 2026 (Tuesday) | | Payment by Successful Bidders | March 25, 2026 (Wednesday) |
Contact Information for Auction Issues
If you face technical difficulties on auction day:
- Core Banking Operations Team: 022 69870466 or 022 69870415
- IDMD Auction Team (other auction queries): 022 22702431 or 022 22705125
- Public Debt Office (physical bids in case of system failure only): 022 22603456, 022 22603457, or 022 22603190
Bottom Line for NRIs
This auction offers a wide menu of state government bonds across tenors from 5 years all the way to 25 years. If you want sovereign backed rupee income with yields typically higher than central government bonds, SDLs deserve a spot on your radar. The RBI Retail Direct portal has made it much easier for individual investors, including NRIs, to participate directly without going through a broker or mutual fund.
Just remember to factor in currency risk (if you plan to repatriate), tax implications on interest income under Indian tax law, and the repatriation rules under FEMA when you make your investment decision.
Source: RBI Press Release 2025 2026/2300, dated March 21, 2026