States borrowing cost rises 4 basis points to 7.41 pc

In the last weekly auction of the June quarter, 12 states raised Rs 22,500 crore in debt on Tuesday.

The amount is 5 per cent lower than the indicated Rs 23,600 crore for the week at an average weighted cut-off rate of 7.41 per cent, up 4 basis points from the last auction.

The rise in the average pricing is primarily due to an increase in the weighted average tenor to 16 years from 14 years, Icra Ratings said in a note.

The spread between the 10-year state security and the 10-year Government of India security inched up to 34 bps.

As a result, the weighted average cost rose 4 bps to 7.41 per cent, the rating agency said.