Home Commodity Market News Short-Term Debt: Bajaj Fin, Tata Capital Fincl tap mkt for IPO funds

Short-Term Debt: Bajaj Fin, Tata Capital Fincl tap mkt for IPO funds

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Informist, Wednesday, Dec 1, 2021

 

By Vishal Sangani

 

MUMBAI – Bajaj Finance Ltd and Tata Capital Financial Services Ltd tapped the market to raised funds through ultra short-term debt papers for requirements related to initial public offerings, dealers said.

 

The non-bank lenders raised funds through ultra-short term CPs at a 4.25%.

 

These CPs were issued by non-bank lenders to raise funds for clients subscribing to large initial public offering of equity shares. Lender are raising funds for Star Health and Allied Insurance Co Ltd’s initial public offering.

 

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

 

However, the total amount raised through CPs today declined because most companies remained on the sidelines as they weren’t in immediate need for funds, dealers said.

 

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

 

Today only two companies tapped the market as against 14 issuers on Monday.

 

So far today, CPs aggregating 65.00 bln rupees were issued, as against 75.85 bln rupees sold on Tuesday. Bajaj Finance was the major issuer, raising 35 bln rupees through papers maturing on Dec 13 at 4.25%.

 

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

 

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

 

Market participants expect rates on short-term debt papers likely to be range bound ahead of the outcome of the Reserve Bank of India’s next monetary policy review meet from Dec 6-8.

 

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.

 

Liquidity in the banking system is estimated to be in a surplus of over 7.75 trln rupees as against 7.19 trln rupees on Tuesday.

 

The liquidity surplus is expected to widen in the coming days because of month-end spending by the government for salary and pension payments.

 

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

 

–Secondary market

* Axis Bank’s CD maturing on Jun 15 was dealt two times at a weighted average yield of 4.0700%

* Reliance Jio Infocomm’s CP maturing on Feb 4 was dealt three times at a weighted average yield of 3.6700%

 

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

Today

Previous

Today

Previous

6.501.609.659.55

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

End

 

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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