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Short-Term Debt: CP issuances surge; SIDBI raises 25 bln rupees

Informist, Monday, May 23, 2022


By Richard Fargose


MUMBAI – Issuances of commercial papers surged today as issuers sought to meet fresh requirements for funds, dealers said. Some companies also tapped the short-term debt market to roll over papers set to mature in the coming days.

So far today, CPs aggregating 38.50 bln rupees were issued, as against 9 bln rupees sold on Friday. Small Industries Development Bank of India raised 25 bln rupees through papers maturing on Feb 27 at 6.12%.

Meanwhile, supply of fresh CDs by state-owned banks was low as there was no immediate need for funds.


Rates on short-term debt papers were unchanged. Rates on three-month CPs of non-bank finance companies were quoted at 5.50-5.80%, while those on papers of manufacturing companies were quoted at 5.25-5.45%.


Rates on three-month CDs were quoted at 5.10-5.30%.


Rates on short-term debt papers are expected to rise due to narrowing of surplus liquidity in the banking system and a likely rate hike by the Reserve Bank of India in its June policy.


Liquidity in the banking system has narrowed further due to outflows on account of goods and services tax payments and hike in banks’ cash reserve ratio.


The hike in cash reserve ratio of banks pulled out liquidity to the tune of 870 bln rupees.


On May 4, the RBI hiked cash reserve ratio of banks by 50 basis points to 4.5% of net demand and time liabilities.


–Primary market

* Indian Oil Corp, Small Industries Development Bank of India, LIC Housing Finance, and Tata Cleantech Capital raised funds through CPs.


–Secondary market

* Canara Bank’s CD maturing on Tuesday was dealt at a weighted average yield of 4.2345%

* Reliance Industries’ CP maturing on Jun 27 was dealt at a weighted average yield of 4.7404%


At 1530 IST, the following were the volumes–in bln rupees–in the secondary market for short-term debt, 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 Tanima Banerjee 


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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