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Icra Ratings in its recent note stated that after remaining stable for many weeks, the cost of borrowing for states inched up by 5 basis points to 7.64 per cent at January 23 auction when 15 of them raised Rs 25,700 crore from the market.

It said the amount of debt raised is a 13-week high and for the first time shows an annualised growth of 8 per cent year-to-date -- a first as throughout the year, the weekly borrowing has been below the year-ago weeks, yet 15 per cent lower than the indicated amount in the borrowing calendar. The weighted average cut-off on state government loans rose 5 basis points to 7.64 per cent over the previous week, and the weighted average tenor rose to 13 years from 11 during the week.

Aidti Nayar head research and outreach at Icra said the spread between the 10-year state bonds and G-sec (government securities) yield stood at 30 basis points today, amidst an inverted yield curve. States have cumulatively raised Rs 5.12 lakh crore from the market, 6.7 per cent lower than what they did last year when it was Rs 5.46 lakh crore.