Telangana Govt Plans To Raise Rs 18,900 Crore via Bond Auctions in Q1 of FY27

Hyderabad: The state government has placed an indent to raise Rs 18,900 crore through the auction of bonds in the first quarter (April–June) of the new fiscal 2026–27, according to data released by the Reserve Bank of India on Friday. The proposed borrowing forms part of the state government’s larger plan to mobilise Rs 73,383 crore through market borrowings during the financial year, as outlined in the State Budget that was recently passed by the Assembly.

As per the borrowing calendar submitted to the RBI, the state plans to raise funds in multiple tranches: Rs 2,000 crore and Rs 1,900 crore on April 7; three tranches of Rs 1,000 crore each on April 21; Rs 2,000 crore each in two tranches on May 5; Rs 750 crore, Rs 500 crore and Rs 750 crore on May 19; Rs 2,000 crore each in two tranches on June 2; and Rs 750 crore, Rs 750 crore and Rs 500 crore on June 16.

The borrowings are structured across varying tenures to distribute repayment obligations evenly over time. A significant portion of the loans will have longer repayment periods ranging from 16–20 years, 21–25 years and beyond 25 years, while some borrowings are planned with shorter tenures of 6–10 years and 11–15 years.

The RBI noted that market borrowing has emerged as a key source for states to finance their fiscal deficits. It said the central bank has taken several measures over the years to strengthen the issuance framework of state government Securities and improve their liquidity in the secondary market.

In its role as cash and debt manager, the RBI has been encouraging states to adopt the Benchmark Issuance Strategy (BIS) to enhance transparency and provide greater clarity to investors. With the concurrence of states, the RBI has decided to introduce BIS on a pilot basis from 2026–27. Nine states — Andhra Pradesh, Bihar, Chhattisgarh, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, Telangana and Uttar Pradesh — have been included in the initiative, under which securities will be issued in specific benchmark tenors as per a pre-announced calendar.

In the previous financial year (2025–26), the state government had budgeted market borrowings of Rs 64,539 crore but exceeded the target by raising Rs 84,188 crore. The higher borrowing was attributed to loan restructuring and swapping of loans contracted by the previous BRS government, replacing high-interest loans with lower-interest ones and extending repayment tenures to ease the debt servicing burden on the state exchequer.