Kerala borrows Rs1000 cr through 5-year SDLs at 5.53pc

MUMBAI: Kerala has borrowed on Tuesday (June 30) Rs1000 crore from the market through issuing 5-year state development loans (SDLs) or bonds, at a coupon rate of 5.53 per cent.

This will take the total market borrowings by the state through SDLs up to Rs12,400 crore against the estimated borrowing of about Rs45,000 crore allocated for the current financial year, including the additional 2 per cent allowed by the Union Finance Ministry in the wake  of the COVID 19 outbreak and the financial crisis thereon.

In fact, Kerala had notified to issue only Rs500 crore SDLs, but later on decided to raise it by another Rs500 crore, maybe the favourable coupon rate has prompted the state to double the initial amount.

Out of the seven states participated in the SDL auction on Tuesday (June 30), five states including Kerala revised their borrowing upwards from the notified amounts.

While Gujarat accepted additional Rs500 crore, Maharashtra accepted additional Rs1000 crore, whereas Rajasthan and Tamil Nadu went for additional Rs500 each through two SDLs of different tenures this time. The total amount thus raised by the states reached Rs12,000 crore, up from Rs9000 initially notified.

Tamil Nadu has raised Rs1250 by issuing 35-year SDLs which was struck at 6.68 per cent, whereas Rajasthan has also gone for a 30-year SDL to raise Rs750 crore at 6.67 per cent.

But Kerala reduced the tenure after having issued 15-year SDLs in the first auction of the year on April 7, where the state burnt its fingers as the investors demanded rates as high as 8.96 per cent.

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