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Short-Term Debt: NABARD borrowing boosts CP volumes, rates unchanged

Informist, Tuesday, Jan 18, 2022


By Vishal Sangani


MUMBAI – Funds raised through commercial papers saw a spike today as National Bank for Agriculture and Rural Development borrowed 45.0 bln rupees via the short-term debt instrument maturing in three and four months.


Also, a few companies rolled over papers set to mature in the coming days, while others tapped the market to meet fresh requirements for funds.


So far today, commercial papers aggregating 61.00 bln rupees were issued, compared with those amassing 24.50 bln rupees on Monday.


Supply of short-term debt papers by big-ticket issuers was readily absorbed owing to their low risk profile.


Despite a surge in issuances, rates on commercial papers were unchanged today owing to a steady demand from mutual funds that are witnessing a steady inflow of funds and ploughing back money into short-term debt instruments, dealers said.


Rates on three-month commercial papers of manufacturing companies were quoted at 3.75-4.00%, while those on papers of non-banking financial companies were unchanged at 4.05-4.25%.


Market participants expect rates on short-term debt papers to rise marginally in the coming days as surplus liquidity in the banking system narrowed.


Liquidity in the banking system is estimated to be in a surplus of over 6.21 trln rupees, compared with 6.48 trln rupees on Monday.


Surplus liquidity in the banking system narrowed because of outflows on account of government bond payments. It is expected to shrink further in the coming days due to outflows on account of goods and services tax payments.


On the other hand, banks did not issue any certificates of deposit today as there was no immediate need for funds.


Rates on three-month certificates of deposit were quoted at 3.65-3.85%, in the secondary market.



–Primary market

* HDFC Credila Financial Services, ONGC Petro additions, Axis Securities, HDFC Securities, National Bank for Agriculture and Rural Development and Hindustan Petroleum Corp raised funds through commercial papers.


–Secondary market

* Kotak Mahindra Bank’s certificates of deposit maturing on Jan 18, 2023 was dealt three times at a weighted average yield of 4.6000%

* National Bank for Agriculture and Rural Development’s commercial paper maturing on Jan 31 was dealt three times at a weighted average yield of 3.7489%


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






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 Deepshikha Bhardwaj


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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