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States borrow 37.7% less than expected from the bond market in Q4FY22

With rising commodity prices and geopolitical uncertainty, there had been concerns about rising borrowing costs

March 31, 2022 / 08:56 AM IST
Gross SDL issuance of Rs 2,353 billion in the quarter was much lower than Rs 3,240 billion, which had been indicated in this quarter’s auction calendar. (Photo:Pexels)

Gross SDL issuance of Rs 2,353 billion in the quarter was much lower than Rs 3,240 billion, which had been indicated in this quarter’s auction calendar. (Photo:Pexels)

State development loans (SDL) for the fourth quarter of FY22 was a significant 37.7% lower than had been expected, thanks to increased transfers from the Central Government, according to a report by the debt rating agency ICRA.

Gross SDL issuance of Rs 2,353 billion in the quarter was much lower than Rs 3,240 billion, which had been indicated in this quarter’s auction calendar. The rating agency has said that this was in line with their expectation.

Also, the issuance for the fiscal was lower than that for the previous fiscal, both in gross and net numbers. “Gross and net SDL issuance in FY2022 was ~12% and ~24% lower than FY2021, respectively,” said the report.