Short-Term Debt:CP supply up on demand for fund by NBFCs; rates unch

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Short-Term :CP supply up on for fund by NBFCs; rates unch

Monday, Jan 20

 

By Vishal Sangani

 

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– Issuances of commercial papers by non-bank finance companies rose today due to funding requirements and also as they rolled over papers set to mature in coming days, dealers said.

 

So far today, CPs worth 30.25 bln rupees have been issued, of which NBFCs raised 29.50 bln rupees. National Bank for and Rural was the major issuer, raising 20 bln rupees through papers maturing in five months at 5.65%.

 

On Friday, CPs aggregating 15.95 bln rupees were issued.

 

Issuances by manufacturing companies were lower today due to low requirement for and also as they had borrowed heavily last week, dealers said.

 

CP issuances are expected to remain firm in the coming days as companies may tap the to roll over papers that are set to mature in the comings days. During Jan 20-31, CPs to the tune of 705.16 bln rupees are set to mature, according to data compiled by Cogencis.

 

Rates on short-term debt papers were unchanged today due to steady demand from mutual funds, dealers said.

 

Rates on CPs of non-bank finance companies maturing in March were quoted at 5.40-5.55%, and those on manufacturing companies of the same maturity were in the range of 5.20-5.25%.

 

Rates on CDs maturing at the end of March were at 5.15-5.30%.

 

Rates were also steady due to ample liquidity in the banking system. Liquidity in the banking system is estimated to be in a surplus of 3.05 trln rupees.

 

IndusInd Bank was the lone issuer of certificates of deposit today. The private bank raised 4.5 bln rupees, dealers said.

 

On Friday, CDs worth 20.0 bln rupees were issued.

 

Most did not tap the market due low demand for funds as systemic liquidity is ample.

  

–Primary market

* Muthoot Finance, SBI Cards & Payments , Tata Capital Financial , ICICI Home Finance, National Bank for Agriculture and Rural Development, Blue Star and Godrej Industries raised funds through CPs

 

–Secondary market

* Bank of Baroda’s CD maturing on Jan 12, 2021 was dealt four times at a weighted average yield of 5.9950%

* NABARD’s CP maturing on Mar 13 was dealt three times at a weighted average yield of 5.1699%

 

Following are the volumes at 1640 IST in the secondary market for short-term debt, in bln rupees, as detailed by the Clearing Corp of India’s F-TRAC platform:

 

Certificates of deposit

Commercial papers

Today

Previous

Today

Previous

11.28

16.15

21.34

15.30

 

NOTE: Details of the have been received from market sources

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Arshad Hussain

 

Cogencis Tel +91 (22) 6619-0000
Send comments to feedback@cogencis.com

 

This copy was first published on the Cogencis WorkStation

© Cogencis Information Services Ltd. 2020. All rights reserved.

Source: Cogencis

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