Weighted average cut-off at G-Sec auction eases 6 bps to 7.45 per cent

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The weighted average cut-off at the State Government Securities (SGS) auction on Tuesday eased to 7.45 per cent from 7.51 per cent at last week’s auction in the backdrop global trends as well as the recently announced buyback of Government of India securities (G-sec), according to ICRA.

Six states raised ₹9,900 crore through SGS on May 7, 2024, a sharp 58 per cent below the ₹23,400 crore indicated for this week in the Q1 FY2025 indicative calendar of market borrowings by State Governments/ Union Territories.

The weighted average tenor at the auction dipped to 15 years from 16 years last week.

The spread between the cut-off of the 10-year SGS and the 10-year G-sec (7.10 GS 2034) yield eased to 35 basis points (bps) on May 7, 2024, from 38 bps last week, the rating agency said.

The states that raised funds via SGS auction were Andhra Pradesh (₹3,000 crore), Himachal Pradesh (₹700 crore), Meghalaya (200 crore), Punjab (₹1,000 crore), Tamil Nadu (₹2,000 crore) and Telangana (₹3,000 crore).