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

Informist, Monday, Nov 7, 2022

By Vishal Sangani


MUMBAI – A large issuance by Small Industries Development Bank of India led to a spike in funds raised through commercial papers today.


So far today, CPs aggregating 64.00 bln rupees were issued, against 3.25 bln rupees on Friday. Small Industries Development Bank of India raised 49.00 bln rupees in total through papers maturing on Jan 31 and three months at 6.93% and 6.95%, respectively.


Financial institutions tapped the market to meet their funding requirements and to roll over papers that are set to mature in the coming days.


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


Non-banking finance companies were the major issuers today, tapping the market for their credit disbursement, dealers said.


Domestic money markets are closed on Tuesday on account of Gurunanak Jayanti.


Despite a surge in issuances, rates on short-term debt papers were range bound because of firm demand from mutual funds, dealers said.


Mutual funds 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 three-month CPs were quoted at 7.25-7.45%, while those on papers of manufacturing companies were quoted at 7.10-7.35%.


Rates on three-month certificates of deposit were quoted at 6.95-7.25%.


Issuances of certificates of deposits increased today as a few private banks tapped the market for its funding needs, dealers said.


So far today, CDs aggregating 30.00 bln rupees were issued, against 3.25 bln rupees on Friday. IndusInd Bank and IDFC First Bank raised 15.00 bln rupees each through papers at 6.70% and 7.14%, respectively.


Private lenders also tapped the market to roll over papers set to mature in the coming days.


Supply of fresh CDs by other banks were low as there was no immediate need for funds owing to surplus liquidity in the banking system.


Liquidity in the banking system is currently estimated to be in a surplus of over 858.40 bln rupees as against 939.66 bln rupees on Friday.


–Primary market

* Small Industries Development Bank of India, Tata Motors Finance, Aditya Birla Finance, Can Fin Homes and HDFC Securities raised funds through CPs.


–Secondary market

* Kotak Mahindra Bank’s CD maturing on Feb 3 was dealt at a weighted average yield of 6.8501%

* Tata Capital Financial Services’ CP maturing on Dec 8 was dealt two times at a weighted average yield of 6.6747%


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.


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Source: Cogencis

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