State Government Borrowings: Care Ratings
A sign for Covid-19 is displayed at a village in Khair district, Uttar Pradesh, India. (Photographer: Anindito Mukherjee/Bloomberg)

State Government Borrowings: Care Ratings

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BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Care Ratings Report

States and UTs have been resorting to higher market borrowings to meet the shortfalls in their finances consequent to the sharp fall in their revenues due to the lockdown led disruptions in economic activity along with the increase in expenditure that is being incurred by them for controlling and mitigating the impact of the pandemic.

  • Eight states raised a total of Rs.12,206 crore at the auction of the state government securities or state development loans (SDLs) held today.
  • This was Rs. 250 crore higher than the notified amount of the auction. The additional amount was accepted by Telangana.
  • So far in the current fiscal year (Apr. 7 2020 - Jan. 19 2021), 28 states and 2 UTs (Union Territories) have cumulatively raised a total of Rs.5.83 lakh crore via market borrowings, 34% more than the borrowings in the corresponding period of 2019-20 (Rs. 4.34 lakh crore). The states have so far raised 71% of the scheduled market borrowings as per the indicative calendar for 2020-21.
  • The weighted average cost of borrowing for the state government dated securities auctioned today; across states and tenures, at 6.48% was 7 bps higher than a week ago (6.41% on 12 Jan’21).

Click on the attachment to read the full report:

State_Government_Borrowings_-_January_19_2021.pdf

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This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

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