Informist, Wednesday, May 24, 2023
By Vishal Sangani
MUMBAI – Issuances of commercial papers were low today as most companies weren’t in immediate need for funds, and also because there were a few rollovers in the primary market.
Supply by non-banking finance companies was low because they have already rolled over papers set to mature in the next few days, dealers said.
So far today, CPs aggregating 10.50 bln rupees were issued, against 27.50 bln rupees on Tuesday. HDB Financial Services was the biggest issuer, raising 6.50 bln rupees in total through papers maturing in two and three months at 7.13%.
Demand from a few mutual funds was low as they were reluctant to invest at lower rates, a dealer from a brokerage house said. Since last week, rates on short-term debt papers are down 35-40 basis points in the primary market after the Reserve Bank of India injected liquidity in the banking system through a 14-day variable rate repo auction and withdrawal of 2,000-rupee denomination banknotes.
Rates on short-term debt papers were flat today due to lower issuances of such papers, dealers said.
Rates on three-month CPs issued by non-banking finance companies were quoted at 7.05-7.20%, while rates on papers of manufacturing companies were quoted at 6.90-7.10%.
Rates on three-month certificates of deposit were quoted at 6.80-7.00%.
Bank of Maharashtra was the lone issuer of certificates of deposit today, raising 25 bln rupees at 7.07% through papers maturing in three months. The state-owned bank tapped the market to meet funding requirements, dealers said.
Liquidity in the banking system is currently estimated to be in a surplus of 442.55 bln rupees, down from 474.84 bln rupees on Tuesday.
Outflows on account of payments for state bonds auctioned on Tuesday may result in the narrowing of liquidity. The government raised 185.50 bln rupees through the sale of securities at the auction.
–Secondary market
* Federal Bank’s CD maturing on Aug 21 was dealt twice at a weighted average yield of 7.0000%
* National Bank for Agriculture and Rural Development’s CP maturing on Jun 1 was dealt 10 times at a weighted average yield of 6.8097%
At 1630 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 Avishek Dutta
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