In H2 FY27 g-sec borrowing calendar, the central government will borrow Rs 7.9 tn and Rs 6.3 tn on a gross and net basis
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As per the H2 FY27 g-sec borrowing calendar, the central government will borrow Rs 7.9 tn and Rs 6.3 tn on a gross and net basis, respectively (the corresponding figures for H2 FY26 were Rs 6.7 tn and Rs 4.8 tn, respectively). H2 will constitute ~52% of gross issuances in FY27 vs. ~45% in H2 FY26. For FY27, the gross g-sec borrowing comes to Rs 16.0 tn, modestly below the adjusted gross borrowing target of Rs 16.1 tn (the BE figure of Rs 17.2 tn was adjusted lower due to switches conducted during Feb-Mar 2026). Jan-27 will see the highest net issuance, at Rs 1730 bn, while Mar-27 will see the lowest issuance of Rs 350 bn. Issuance shifts towards the belly: the 6–15Y share rises to 53%, while 1–5Y moderates to 19%; the 16–50Y share moderates to 28%. The weighted average maturity is estimated to moderate from 18.2Y in H2 FY26 to 18.0Y in H2 FY27.
Lighter short-dated supply will partly cushion front-end yields from our anticipated 50 bps of rate tightening by the MPC in H2 FY27. On a directional basis, g-sec yields continue to face a trifecta of headwinds: (i) domestic supply pressure, (ii) spillovers from harder US rates, and (iii) macro-financial fallout from the ongoing Middle East crisis. We retain our 10Y G-sec yield call of 7.25% by Mar-27; sustained Brent price near the current levels of USD 105 pb would pose upside risk to both our policy-rate and yield forecasts.