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Tuesday, May 17, 2022

Short-Term Debt: CP issues up 3-fold as cos roll over maturing papers

Informist, Monday, Jan 17, 2022

 

By Vishal Sangani

 

MUMBAI – Issuances of commercial papers increased three-fold today as a few companies rolled over papers set to mature in the coming days and tapped the market for their funding needs, dealers said.

 

Large issuances by Indian Oil Corp also led to a spike in funds raised through CPs.

 

So far today, CPs aggregating 24.5 bln rupees were issued, as against 7.5 bln rupees issued Friday. Indian Oil Corp raised 16 bln rupees through papers maturing on Feb 11 at 3.48%.

 

The supply of papers by big-ticket issuers was readily absorbed because of their low risk profile.

 

Despite surge in issuances, rates on short-term debt papers were unchanged because of steady demand from mutual funds and prevailing surplus liquidity in the banking system, dealers said.

 

Demand from mutual funds was unchanged as they are seeing steady inflows through liquid funds, which they are deploying in such papers. They are also reinvesting the funds received from the maturity of short-term papers.

 

Rates on three-month CPs of manufacturing companies were quoted at 3.70-3.95%, while those on papers of non-bank finance companies were unchanged at 4.05-4.25%.

 

Liquidity in the banking system is estimated to be in a surplus of over 6.48 trln rupees.

 

Banks did not issue any certificates of deposit as there is no immediate need for funds owing to surplus liquidity in the banking system.

 

Rates on three-month CDs were quoted at 3.65-3.85% in the secondary market.

 

–Primary market

* Indian Oil Corp, Shree Cement, Chennai Petroleum Corp, Godrej Industries, JM Financial Products, Can Fin Homes, Blue Star and Sundaram Home Finance raised funds through CPs.

 

–Secondary market

* Kotak Mahindra Bank’s CD maturing on Jan 17, 2023 was dealt two times at a weighted average yield of 4.6000%

* Panatone Finvest’s CP maturing on Feb 11 was dealt at a weighted average yield of 3.8998%

 

Following are the 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

16.256.053.407.45

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 Vipul Vivek

 

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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© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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