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Tuesday, December 7, 2021

Short-Term Debt:CP supply dn as cos stay on sidelines amid low demand

Informist, Thursday, Nov 25, 2021


By Vishal Sangani

MUMBAI – Issuances of commercial papers fell today because companies remained on the sidelines as they were in no immediate need of funds, and also due to lack of big-ticket issuances, dealers said.


Funds raised by state-owned companies were also low because they have already rolled over papers set to mature in the next few days.


So far today, CPs aggregating 24.00 bln rupees were issued, as against 34.50 bln rupees on Wednesday. Reliance Jio Infocomm was the major issuer, raising 10 bln rupees through papers maturing in three months at 3.71%.


Demand from fund houses was also low as they have parked large amounts of funds in ultra short-term CPs of non-banking finance companies.


According to market participants, fund houses have invested around 380 bln rupees in ultra short-term CPs.


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


Rates on short-term debt papers moved in a narrow range today due to low issuances, dealers said.


Rates on three-month CPs of manufacturing companies were quoted at 3.70-3.85%, while those on papers of non-bank finance companies were unchanged at 3.90-4.30%.

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 Wednesday, banks had raised 51 bln rupees through CDs. Rates on three-month CDs were quoted at 3.55-3.70%, in the secondary market.


Liquidity in the banking system is estimated to be in a surplus of over 7.15 trln rupees as against 6.95 trln rupees on Wednesday.


–Primary market

* Birla Group Holdings, ONGC Petro additions, L&T Finance, Steel Authority of India and Reliance Jio Infocomm raised funds through CPs.


–Secondary market

* HDFC Bank’s CD maturing on Mar 21 was dealt four times at a weighted average yield of 3.6999%

* Reliance Industries’ CP maturing on Mar 14 was dealt four times at a weighted average yield of 3.7529%


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 Aditya Sakorkar


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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