Informist, Tuesday, May 9, 2023
By Vishal Sangani
MUMBAI – Issuances of commercial papers increased today as non-banking finance companies tapped the market to meet their funding requirement and to roll over papers set to mature in the coming days, dealers said.
A few non-banking finance companies also raised funds to meet their credit disbursement requirement.
Large issuances by Reliance Industries also led to a spike in funds raised through CPs today.
So far today, CPs aggregating 39.50 bln rupees were issued, against 30.00 bln rupees on Monday. Reliance Industries raised 15 bln rupees through papers maturing in July at 7.15%.
The supply of papers by big-ticket issuers was readily absorbed because of their low risk profile.
CP issuances by state-owned companies were subdued because they remained on the sidelines as they weren’t in immediate need of funds.
Rates on short-term debt papers were in a narrow range due to steady demand from mutual funds, dealers said.
There is a steady inflow in liquid funds of mutual funds, which they are deploying in such papers. They are also reinvesting the funds received from maturity of short-term papers.
Rates on three-month CPs issued by non-banking finance companies were quoted at 7.40-7.60%, while rates on papers of manufacturing companies were quoted at 7.25-7.50%.
Rates on three-month certificates of deposit were quoted at 7.15-7.35%.
On the other hand, issuances of certificates of deposit increased today as Punjab National Bank and Canara Bank tapped the market to meet capital requirements for funds as surplus liquidity narrowed in the banking system.
CDs aggregating 45 bln rupees were issued, against 20 bln rupees on Monday. Punjab National Bank was the major issuer, raising 30 bln rupees in total through papers maturing in July and three months.
Liquidity in the banking system is currently estimated to be in a surplus of 228.94 bln rupees, down from 782.91 bln rupees on Monday. The surplus has narrowed due to payments for excise duty and government bonds.
–Primary market
* ICICI Securities, Aditya Birla Money, Birla Group Holdings, Can Fin Homes, Aditya Birla Housing Finance, and Reliance Industries raised funds through CPs.
–Secondary market
* Canara Bank’s CD maturing on Aug 18 was dealt at a weighted average yield of 7.1699%
* National Bank for Agriculture and Rural Development’s CP maturing on May 15 was dealt two times at a weighted average yield of 7.1014%
At 1620 IST, following were the volumes, in bln rupees, in the secondary market for short-term debt, as detailed by the Clearing Corp of India’s F-TRAC platform:
NOTE: Details of the deals have been received from market sources.
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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