Analysis of Borrowing Calendars for Union G-secs, T-bills, and State SGS for FY27

Analysis of Borrowing Calendars for Union G-secs, T-bills, and State SGS for FY27​

SBI Securities Report details the borrowing calendars for Union Government securities (G-secs) for the first half of Fiscal Year 2027 (H1FY27), Union Treasury bills (T-bills) for Q1FY27, and State Securities (SGS) for Q1FY27. The report notes the challenging fiscal arithmetic facing both the Union and State governments due to increased overall borrowing. It also reviews changes in ownership profiles and tenors associated with these borrowings.

Fiscal Outlook and Borrowing Dynamics​

The report highlights that the Union faces pressure in Fiscal Year 2027, as revenue assumptions in the Union Budget appear optimistic. This optimism is tempered by potential revenue squeezes from ongoing oil price spikes, which have necessitated duty reductions on petrol and diesel, further impacting the fiscal deficit. The nominal GDP estimate is also under pressure from methodological revisions.

For FY27, gross borrowing for the Union is expected to reach Rs. 16.09 trn, representing a 10.1% year-on-year surge. This figure is approximately Rs. 1.21 trn lower than the amount projected in the Union Budget. This reduction is attributed to planned switch auctions.

The borrowing schedule suggests that the Union will raise Rs. 8.2 trn in H1FY27, which constitutes 51% of the total borrowing planned for the fiscal year. This H1 borrowing will occur through weekly auctions ranging from Rs. 280 bn to Rs. 340 bn. The planned schedule also accounts for Rs. 150 bn to be raised through Sovereign Green Bonds. The limit for the Union's Ways and Means Advances (WMA) has seen a significant increase to Rs. 2.5 trn in H1FY27 from Rs. 1.5 trn in H1FY26.

Treasury Bill Issuances for Q1FY27​

A total of Rs. 2.88 trn in T-bills are scheduled to be auctioned during Q1FY27. These auctions will be conducted weekly, comprising Rs. 120 bn for 91-day T-bills, Rs. 60 bn for 182-day T-bills, and Rs. 60 bn for 364-day T-bills, beginning on April 8, 2026.

The ownership structure of T-bills has seen a notable shift, with banks reducing their holdings and State Governments increasingly utilizing T-bills as a mechanism to temporarily park funds awaiting deployment.

State Borrowing Trends​

State Securities (SGS) borrowings experienced a substantial rise in FY26, influenced by the discontinuation of the GST compensation cess and higher state revenue expenditures. While the report anticipates that gross market borrowing for States may rise moderately in FY27, by approximately 4.5% year-on-year on the high base set by FY26, borrowing in Q1FY27 is expected to be seasonally high, marking a 27% year-on-year increase.

The overall gross market borrowing of States reached Rs. 12,674 bn in FY26, up 18.9% from Rs. 10,733 bn in FY25A.


The report notes that the distribution of funds has shifted, with greater weight being placed on Population and Contribution to GDP, and the removal of revenue deficit grants is expected to benefit more developed States.

Yield Implications and Market Activity​

The analysis concludes by noting that the yield curve for Union G-secs has shown a change in curvature, with steepness up to the 3-year tenor, before tapering off. Similarly, SGS yields and spreads among States have risen. Corporate bond spreads have expanded, and the report observed that market activity remains subdued due to extreme volatility. The spiking Union G-sec yields are linked to the sharp rise in energy prices, which exert upward pressure on the policy rate.

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