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Short-Term Debt: CD issuances down after heavy supply on Tue

Informist, Wednesday, Oct 12, 2022


By Vishal Sangani


MUMBAI – Fund-raising through certificates of deposit fell today as market participants stayed on the sidelines after borrowing heavily on Tuesday, and also as there were no big-ticket issuances.


Today, only Federal Bank tapped the market to raise funds, as against four banks on Tuesday.


So far today, CDs aggregating 5.15 bln rupees were issued, against 118.50 bln rupees on Tuesday.


On Tuesday, Union Bank of India was the major issuer, raising 80.00 bln rupees through CDs.


On the other hand, the volume of funds raised through commercial papers fell today in the absence of big-ticket issuances, dealers said.


So far today, CPs aggregating 36.50 bln rupees were issued, against 87.00 bln rupees on Tuesday. Housing Development Finance Corp was the major issuer, raising 26.95 bln rupees through papers maturing in one year at 7.75%.


On Tuesday, Housing Development Finance Corp and Bajaj Finance had raised 66.00 bln rupees in total through CPs.


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


However, some market participants remained on the sideline due to a surge in rates in the short-term debt market and also due to low requirement for funds.


Rates on short-term debt papers are 40-45 basis points higher in the primary market since last few days, as liquidity in the banking system shrank.


Rates on short-term debt papers were in a narrow range because of lower issuances, dealers said.


Rates on three-month CDs were quoted at 6.70-6.95%.


Rates on three-month CPs of non-banking finance companies were quoted at 6.95-7.15%, while those on papers of manufacturing companies were quoted at 6.80-7.05%.


Liquidity in the banking system is currently estimated to be in a surplus of over 113.06 bln rupees as against a deficit of 87.64 bln rupees on Tuesday.


Liquidity in the banking system returned to surplus as cash balances with the central bank declined. As on Tuesday, cash balances with the RBI were at 7.63 trln rupees as against 7.80 trln rupees on Monday.


–Primary market

* LIC Housing Finance, Tata Capital Financial Services and Housing Development Finance Corp raised funds through CPs.


–Secondary market

* Punjab National Bank’s CD maturing on Oct 14 was dealt three times at a weighted average yield of 6.2929%

* Small Industries Development Bank of India’s CP maturing on Oct 21 was dealt at a weighted average yield of 6.2511%


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 Tanima Banerjee


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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