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Monday, December 5, 2022

Short-Term Debt: CD, CP rates rise as surplus liquidity narrows

Informist, Friday, Oct 7, 2022


By Vishal Sangani


MUMBAI – Rates on short-term debt papers such as certificates of deposit and commercial papers rose today as surplus liquidity in the banking system narrowed, dealers said.


Liquidity in the banking system is currently estimated to be in a surplus of over 742.15 bln rupees as against 1.15 trln rupees on Thursday. The surplus has narrowed due to outflows on account of excise duty payments.


Rates on three-month CDs increased to 6.35-6.55% as against 6.25-6.50% on Thursday.


Rates on three-month CPs of non-banking finance companies rose to 6.75-6.95% compared with 6.55-6.75% on Thursday, while those on papers of manufacturing companies were up by 10 basis points at 6.45-6.70%.


On the issuances side, Axis Bank and Punjab & Sind Bank tapped the market for its funding needs and as also surplus liquidity narrowed in the banking system, dealers said.


CDs aggregating 9.00 bln rupees were issued, as against none on Thursday. Axis Bank was the major issuer, raising 5 bln rupees through papers maturing in one-year at 7.40%.


Meanwhile, funds raised through CPs fell today in the absence of big-ticket issuances, dealers said.


Issuances of CPs also remained low due to lower requirement for funds.


So far today, CPs aggregating 21.00 bln rupees were issued, as against 44.00 bln rupees on Thursday. NTPC was the major issuer, raising 10 bln rupees through papers maturing in one year at 7.30%.


On Thursday, Small Industries Development Bank of India had raised 36 bln rupees through CPs.


Some companies tapped the market to meet their funding requirements and rolled over papers set to mature in the coming days.


–Primary market

* NTPC, Network 18 Media and Investments, Bajaj Finance and Redington India raised funds through CPs.


–Secondary market

* Axis Bank’s CD maturing on Dec 28 was dealt three times at a weighted average yield of 6.2199%

* NTPC’s CP maturing on Monday was dealt at a weighted average yield of 6.1960%


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 Maheswaran Parameswaran


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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