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Short-Term Debt: Large issuances by L&T Finance, IOC boost CP volumes

Informist, Wednesday, Jun 1, 2022


By Vishal Sangani


MUMBAI – A large issuance by L&T Finance and Indian Oil Corp led to a spike in funds raised through commercial papers today.


A few companies also tapped the market to roll over papers set to mature in the coming days to meet their funding requirements, dealers said.


So far today, CPs aggregating 85.00 bln rupees were issued, as against 24.00 bln rupees on Tuesday. Indian Oil Corp raised 30.00 bln rupees in total through papers maturing on Jul 15 and Jul 25. L&T Finance raised 30 bln rupees through papers maturing in June-end at 4.99%.


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


Issuances of CPs also rose today due to firm demand from mutual funds as they have seen continuous inflow into liquid funds, which are then deployed in short-term debt papers. They are also reinvesting the funds received from the maturity of short-term papers.


Rates on short-term debt papers were flat because there are no major events that could have a significant impact on the market.


Rates on three-month CPs of non-bank finance companies were quoted at 5.40-5.70%, while those on papers of manufacturing companies were quoted at 5.15-5.40%.


Rates on three-month CDs were quoted at 5.05-5.25%.


Meanwhile, Indian Bank was the lone issuer of certificate of deposits today, raising 18.50 bln rupees in total through papers maturing in August and September. The state-owned lender tapped the market to meet their funding requirements, dealers said.


Liquidity in the banking system is currently estimated to be in a surplus of over 3.28 trln rupees as against 2.96 trln rupees a day ago.


The surplus is expected to widen further in the coming days on account of the government’s month-end spending in the form of salaries and pension payouts.


–Primary market

* L&T Finance, HDFC Securities, Indian Oil Corp, Hindustan Petroleum Corp, Bajaj Finance, ICICI Securities raised funds through CPs.


–Secondary market

* National Bank for Agriculture and Rural Development’s CD maturing on Feb 14 was dealt two times at a weighted average yield of 6.0201%.

* Reliance Jio Infocomm’s CP maturing on Jun 15 was dealt twice at a weighted average yield of 4.6490%.


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 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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