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STATE DEVELOPEMENT LOANS

 
State Development Loans, or SDLs, as they are colloquially called, are issuances of the respective states in order to manage their own state finances. The structure and nature of SDLs is broadly similar to that of a fixed rate Dated G-Sec. However, these instruments are generally issued for maturities upto 10 years. Also, reissuances of SDLs are extremely rare. In other words, generally, every SDL auction is an auction of a new SDL security and therefore, the auction process is yield based.

Generally, as SDLs have the backing of the respective states, depending on the fiscal health of the states and the consequent risk element associated in such investments, SDLs are traded at a spread above the benchmark G-Sec security. Liquidity of these securities is yet another factor that has a bearing on SDL valuation. However, investment in SDLs may be a good option for investors seeking to earn higher coupons.

As in Dated G-Sec, institutional player dominate this segment. Foreign flows too, have been permitted in SDLs. Non-competitive bidding is allowed in SDLs to the extent of 1% of the notified amount. The trading and settlement mechanism for SDLs remains the same as in case of Dated G-Sec.

STCI PD has been one of the most active players in the debt market. Apart from participating in SDL auctions on proprietary basis, we also accept Competitive and Non-Competitive bids from clients, thereby benefitting them with wider access to debt market. We also, consistently provide two way quotes in all debt securities.

Clients interested in placing bids in Primary auctions and/or buying/selling SDL securities may contact our Sales Personnel on 022-66202224/25/28. We endeavor to provide the best possible returns to our clients, keeping in line with their overall investment objectives.
 
 

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As per our estimates
As per our estimates, CPI for the month of October stood at 3.58% as opposed to 3.28% in September mainly on account of a significant rise in Food and Fuel prices. Core CPI in the current reading saw some moderation, standing at 4.55% compared to 4.61% last month.
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Standing 100 bps
Standing 100 bps higher, WPI came in at 3.59% in October compared to 2.60% in the previous month.
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Industrial production
Industrial production as measured by IIP grew at 3.8% in Oct-17, moderating from 4.5% growth observed in Sep-17, largely led by a surprising momentum in the Mining sector.
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