By CL Jose
3 SDLs to be issued with tenures of 10-yrs, 13-yrs, 15-yrs
THIRUVANANTHAPURAM/March 26-2022: Kerala is concluding the FY22 market borrowings with a bang!
Kerala Government is slated to go for a bumper borrowing to the tune of Rs5000 crore on March 29, being the last borrowing exercise in the current financial year, closing on March 31, 2022.
The state has notified to borrow this amount through the issue of three state development loans (SDLs) or bonds, to the lenders – basically institutions like banks and insurance companies, by way of auctions to be organised by the Reserve Bank of India (RBI).
While the Rs1000 crore SDLs will have a tenure of 13 years, the two Rs2000 crore SDLs have been set to mature in 10 years and 15 years respectively.
The SDL issues, as usual, will be auctioned for yields (interest rates) and the bidders of the lowest yields will be buying the SDLs or the bonds issued by the borrowing states.
Seventeen states will be raising Rs37,353 crore by issuing SDLs on March 29 as per the RBI notification, and Kerala is likely to account for about 14 per cent of the total borrowings, if the auctions go off as scheduled.
With the March-29 market borrowings, Kerala will have closed a borrowings book sized at about Rs25,500 crore for FY22, and the borrowing calendar shows that 31.37 per cent of the total borrowings have taken place during the fourth quarter (Q4) alone.
And more interestingly, 27.45 per cent of the total borrowings, at Rs7000 crore, will have been borrowed during the month of March alone, the last month in the financial year.
