Informist, Wednesday, Dec 27, 2023
By Asmita Patil
MUMBAI – Fundraising through commercial papers surged today as issuers flocked to front load their borrowing for Jan-Mar amid constrained liquidity in the banking system, dealers said. So far in the day, companies and financial institutions have raised a total of 93.25 bln rupees through CPs against 66.5 bln rupees on Tuesday.
National Bank for Agriculture and Rural Development was the biggest issuer, raising 57 bln rupees through papers maturing in three months at 7.31%.
Market consensus is that liquidity in the banking system will remain in deficit for the foreseeable future, which could weigh on rates, dealers said.
At the end of trade on Tuesday, the liquidity deficit in the banking system hit a fresh high of 2.68 trln rupees, as against 2.67 trln rupees on Monday, according to the Reserve Bank of India data.
Rates on short-term debt instruments remained flat despite the high supply, dealers said. Rates on three-month CPs issued by non-banking finance companies were flat at 8.00-8.20%. Rates on papers of similar maturity issued by manufacturing companies were also flat at 7.50-7.70%.
Rates on three-month certificates of deposits also remained flat at 7.40-7.60%. None of the banks issued CDs today.
–Primary market
* NABARD, Axis Securities, Godrej Industries, Can Fin Homes, and LIC Housing Finance raised funds through CPs.
–Secondary market
* Bank of Baroda’s CD maturing on Tuesday was dealt thrice at a weighted average yield of 7.5786%.
* Larsen and Toubro’s CP maturing on Friday was dealt four times at a weighted average yield of 7.0355%.
At 1700 IST, the 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:
End
Edited by Ashish Shirke
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