Informist, Monday, Jul 4, 2022
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By Vishal Sangani
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MUMBAI – Large issuances by L&T Finance Ltd and Indian Oil Corp led to a spike in funds raised through commercial papers today.
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Some companies also tapped the market to roll over papers set to mature in the coming days to meet their funding requirements, dealers said.
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So far today, CPs aggregating 77.50 bln rupees were issued. L&T Finance raised 35.00 bln rupees through papers maturing on Jul 28 at 5.08% and Indian Oil Corp raised 27.50 bln rupees overall through CPs maturing on Aug 22 and Aug 26.
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Papers floated by big-ticket issuers were readily absorbed owing to their low-risk profile.
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On Friday, Hindustan Petroleum Corp was the lone issuer, raising 5 bln rupees through CPs.
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Despite the surge in issuances, rates on short-term debt were unchanged because of steady demand from mutual funds and the prevailing surplus liquidity in the banking system, dealers said.
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There is a steady inflow in liquid funds of mutual funds, which they are deploying in such papers. They are also reinvesting the funds received from maturity of short-term papers.
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Rates on three-month commercial papers of non-bank finance companies were quoted at 5.55-5.80%, while those on papers of manufacturing companies were quoted at 5.35-5.65%.
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Rates on three-month certificates of deposit were quoted at 5.20-5.45%.
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Liquidity in the banking system is currently estimated to be in a surplus of over 3.26 trln rupees as against 2.89 trln rupees on Friday. The surplus has widened on account of the government’s month-end spending in the form of salaries and pension payouts.Â
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Banks did not issue any certificates of deposit today as there is no immediate need for funds owing to surplus liquidity in the banking system.
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On Friday, HDFC Bank was only issuer, raising 20.00 bln rupees through CDs.
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–Primary market
* Poonawalla Fincorp, Indian Oil Corp, L&T Finance, Hindustan Petroleum Corp and ICICI Securities raised funds through CPs.
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–Secondary market
* National Bank for Agriculture and Rural Development’s CD maturing on Feb 17 was dealt at a weighted average yield of 6.0701%
* Reliance Retail Ventures’ CP maturing on Aug 30 was dealt twice at a weighted average yield of 5.1898%
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At 1530 IST, 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:
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NOTE: Details of the deals have been received from market sources.
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End
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IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
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Edited by Avishek Dutta
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Source: Cogencis