SGS outstanding more than doubles to ₹73 lakh crore by FY26; ₹24 lakh crore due for redemption over FY28-FY32: Icra
ADVERTISEMENT
The outstanding stock of state government securities (SGS), the primary source of funding for state fiscal deficits, more than doubled to ₹73 lakh crore as of March 31, 2026, from ₹32.7 lakh crore six years earlier, according to Icra.
The ratings agency said the outstanding SGS stock is now equivalent to nearly 58% of the estimated ₹125.7 lakh crore stock of Government of India securities (G-secs) as of the end of FY26.
Tamil Nadu had the highest outstanding SGS stock at ₹8.3 lakh crore as of March 31, 2026. Maharashtra, Uttar Pradesh, West Bengal, and Karnataka each had outstanding SGS in the range of ₹5-7 lakh crore. Together, these five states accounted for around ₹33 lakh crore, or nearly half of the total SGS outstanding.
Icra also highlighted that the redemption profile of SGS remains heavily front-loaded. Of the estimated ₹73 lakh crore outstanding as of March-end 2026, around ₹24 lakh crore, or one-third of the total, is scheduled to mature during FY28-FY32.
Another ₹20.3 lakh crore is expected to mature during FY33-FY37 while the remaining securities will mature gradually until FY64.
The agency attributed the changing maturity profile to the increasing issuance of longer-tenor securities over the past few years. As a result, the weighted average maturity (WAM) of outstanding SGS rose to 9.8 years by the end of FY26 from 7 years at the end of FY20.
According to Icra, the concentration of redemptions over the FY28-FY32 period suggests that gross SGS issuances are likely to remain elevated over the next five years as states refinance maturing debt.
During this period, the largest redemption obligations are expected to come from Uttar Pradesh, Tamil Nadu, Maharashtra, and Gujarat, the report added.