Reissued bonds account for nearly 66% of state borrowings in H1 FY27

State governments have significantly increased their reliance on reissued bonds to manage their finances, with such bonds accounting for nearly 66% of total market borrowings in the first half of FY27, according to a recent report.

This trend reflects a marked shift over the past two years, as states have grown more active in the debt markets. The reissuance of bonds has become a key financing tool, allowing state governments to tap existing instruments rather than exclusively relying on fresh bond issuances.

The Reserve Bank of India's emphasis on greater market transparency has also supported this movement. Analysts suggest that increased bond reissuances could enhance liquidity in the debt market, making it a more attractive destination for bond investors and benefiting state-level borrowing programmes.