New Delhi, Oct. 30 -- State governments, which increased their market borrowings in the first half of FY26 to finance infrastructure projects and sustain growth momentum, saw a weak appetite for state development loans (SDLs) amid no substantial changes in yields during October.

The latest data from the Reserve Bank of India (RBI) showed SDL issuances slumped 52.88% to Rs.57,010 crore in October from Rs.1.21 trillion in September, the highest monthly borrowing this fiscal. In October 2024, states had raised Rs.64,842 crore.

To be sure, the lack of any substantial relief in yields coincided with a dip in state bond supply in October, as several states temporarily paused fresh issuances. The 10-year SDL yield is currently around 7.20%, we...