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Short-Term Debt:Bajaj Finance, Aditya Birla Fin tap mkt for IPO funds

Informist, Tuesday, Nov 16, 2021


By Vishal Sangani


MUMBAI – Fundraising through commercial papers shot up today as Bajaj Finance Ltd and Aditya Birla Finance Ltd raised funds through ultra short-term debt papers for requirements related to initial public offerings, dealers said.


The non-bank lenders raised around 65 bln rupees through ultra-short term CPs. Bajaj Finance was the major issuer, raising 40 bln rupees through papers maturing on Nov 30 at a coupon of 4.50%.


These CPs were for ultra-short term, issued by non-bank lenders to raise funds for clients subscribing to large initial public offering of equity shares. 

Lenders are raising funds for Tarsons Products Ltd’s initial public offering.


Usually, fund houses invest in such papers of companies as these offer better yields in a short span of time.


The amount raised through CPs also surged today because a few companies tapped the market to meet their funding requirements and rolled over papers set to mature in the coming days.


So far today, CPs aggregating 91.50 bln rupees were issued, as against 23.00 bln rupees sold on Monday.


Rates on short-term debt papers were range bound because of steady demand from mutual funds and huge surplus liquidity in the banking system, dealers said.


Mutual funds have seen a steady inflow in liquid funds, which is deployed in short-term debt papers. They are also reinvesting the funds received from the maturity of short-term papers.


Rates on three-month CPs of non-bank finance companies were unchanged at 3.90-4.30%, while those on papers of manufacturing companies were quoted at 3.60-3.80%.


As the market is not seeing too many issuances of certificates of deposit, investors are parking funds in CPs instead of keeping them idle, said market participants.


On the other hand, no certificates of deposit were issued by banks today. Issuance of CDs has been particularly scarce due to the liquidity surplus in the banking system. With growth in bank deposits consistently outpacing credit growth, banks have had little reason to tap the short-term debt market.


On Monday, Axis Bank, the lone issuer, had raised 14 bln rupees through CDs maturing in one year.


Liquidity in the banking system is estimated to be in a surplus of over 8.29 trln rupees.


Rates on three-month CDs were quoted at 3.55-3.70%, in the secondary market.


–Primary market

* Indian Oil Corp, Tata Power Co, Bajaj Finance, Aditya Birla Finance, Bajaj Financial Securities and Reliance Jio Infocomm raised funds through CPs.


–Secondary market

* Axis Bank’s CD maturing on Jan 28 was dealt two times at a weighted average yield of 3.5500%

* Bajaj Finance’s CP maturing on Dec 7 was dealt at a weighted average yield of 3.8992%


Following are volumes at 1530 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






NOTE: Details of the deals have been received from market sources.



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


Edited by Maheswaran Parameswaran


Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


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Source: Cogencis

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