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Short-Term Debt: Large deal by NABARD boosts CP volumes; rates flat

Informist, Monday, Jul 18, 2022


By Vishal Sangani


MUMBAI – A large issuance by National Bank for Agriculture and Rural Development led to a spike in funds raised through commercial papers today.


A few companies also tapped the market today to meet their funding requirements and rolled over papers set to mature in the coming days.


So far today, commercial papers aggregating 52.00 bln rupees were issued, as against 24.75 bln rupees on Friday. NABARD raised 41.50 bln rupees through papers maturing in three months at 5.47%.


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


Meanwhile, participation was low as less funds were needed and rates remained high.


NTPC-SAIL Power Co today scrapped its plan to raise funds through 91-day paper as the bid rates they received were higher than what the company was willing to pay, a dealer said.


Rates on short-term debt instruments were flat because of steady demand from mutual funds.


There is steady inflow in liquid funds of mutual fund houses that they are deploying in such papers. They are also reinvesting funds received from maturity of short-term papers.


Rates on three-month commercial papers of non-bank financial companies were quoted at 5.70-5.90%, while those on papers of manufacturing companies were quoted at 5.50-5.70%.


Rates on three-month certificates of deposit were quoted at 5.35-5.60%.


Canara Bank was the lone issuer of certificates of deposit today, raising 24.00 bln rupees at 6.10% through papers maturing in February.


The state-owned bank tapped the market for its funding needs and also raised funds as demand for credit picked up due to a rise in small-ticket loans, an increase in working capital loans, and a growth in retail loans.


As per Reserve Bank of India data, the on-year growth in advances of Indian banks rose to a 34-month high of 13.29% in the fortnight to Jul 1, the advances rose by 2.31 trln rupees to 123.81 trln rupees. Banks’ advances grew 12.06% on year in the previous fortnight.


Liquidity in the banking system is currently estimated to be in a surplus of over 2.14 trln rupees as against 2.46 trln rupees on Friday.


–Primary market

* Tata Capital Financial Services, Hindustan Petroleum Corp and National Bank for Agriculture and Rural Development raised funds through commercial papers.


–Secondary market

* Axis Bank’s certificates of deposit maturing on Mar 7 were dealt two times at a weighted average yield of 6.1500%

* Small Industries Development Bank of India’s commercial papers maturing on Oct 31 were dealt seven times at a weighted average yield of 5.6002%


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:


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


For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.


Cogencis news is now Informist news. 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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