Informist, Wednesday, Jun 21, 2023
By Subhana Shaikh
MUMBAI – A large issuance by Small Industries Development Bank of India led to a spike in funds raised through commercial papers today. The state-owned entity tapped the market to meet their funding requirements, dealers said.
So far today, CPs aggregating 98.75 bln rupees were issued as against 39.75 bln rupees on Tuesday. Of this, Small Industries Development Bank of India raised 60 bln rupees through papers maturing in three months at 6.95%.
The supply of papers by big-ticket issuers was easily absorbed because of their low risk profile.
Some companies also tapped the market to meet their funding requirements and to roll over papers set to mature in the coming days.
Rates on short-term debt papers were largely range-bound because of steady demand from mutual funds, dealers said. Despite liquidity constraints, rates on short-term papers remain attractive for borrowers as the demand is robust as compared to supply, dealers said.
Rates on three-month CPs issued by non-banking financial companies were quoted at 7.07-7.22%, and rates on papers of manufacturing companies were quoted at 6.95-7.10%.
Rates on three-month certificates of deposit stood at 6.85-6.90%. Canara Bank was the lone issuer of CDs today, raising 6 bln rupees at 7.12% through papers maturing in six months.
Liquidity in the banking system is currently estimated to be in a surplus of 348.43 bln rupees, higher from 186.57 bln rupees on Tuesday, which was the lowest liquidity surplus in nearly three months.
–Primary market
* Apart from SIDBI, Larsen & Toubro, Tata Power Co, Grasim Industries, Godrej Industries, Tata Motors, Tata Capital, ICICI Securities and Aditya Birla Housing Finance raised funds through CPs.
* Canara Bank raised funds through CDs.
–Secondary market
* Export Import Bank of India’s CD maturing on Aug 2023 was dealt at a weighted average yield of 6.83%
* SIDBI’s CP maturing on Sep 2023 was dealt six times at a weighted average yield of 6.9608%
At 1830 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
With inputs from Asmita Patil
Edited by Maheswaran Parameswaran
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