Investors care less for states’ performance: India Ratings

State development loans or SDLs are treated more as a generic asset class with investors making limited differentiation between states’ performances, according to an analysis by ratings firm India Ratings. This has skewed market dynamics and bunched up interstate spreads of most SDLs, it says. According to the ratings firm, Maharashtra SDLs rank the best among the states when it comes to the trading of bonds, and appetite for Maharashtra SDLs is strong. On the other end of spectrum is Bihar, where market activity is limited compared to other state bonds.'