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Wednesday, March 29, 2023

Short-Term Debt: CP issuances rise on demand for funds by 2 NBFCs

Informist, Tuesday, Jan 31, 2023


By Vishal Sangani


MUMBAI – Issuances of commercial papers rose today as LIC Housing Finance Ltd and Tata Capital Financial Services Ltd tapped the market to meet their funding needs and to roll over papers set to mature in the coming days, dealers said.


Most market participants remained on the sidelines due to caution ahead of the presentation of the Union Budget for 2023-24 (Apr-Mar) on Wednesday.


The activity in the primary market was also subdued today because most of the issuers and investors remained on the sidelines as companies had already borrowed funds throughout the current month.


So far today, CPs aggregating 12.75 bln rupees were issued. LIC Housing Finance was the biggest issuer. It raised 8.75 bln rupees through papers maturing in three months at 7.34%.


On Monday, Godrej Industries was the only issuer. The company raised 750 mln rupees through CPs.


Capital raising by companies was low also due to a surge in rates in the short-term debt market as liquidity is in deficit. Liquidity in the banking system is currently estimated to be in a deficit of 23.64 bln rupees, down from 120.21 bln rupees on Monday.


Liquidity may improve further in the coming days due to inflows on account of the government’s month-end spending in the form of salaries and pension payouts.


Rates on CPs were in a narrow range because of lower market participants, dealers said. Rates on three-month CPs issued by non-banking finance companies were quoted at 7.50-7.75%, while rates on papers of manufacturing companies were quoted at 7.25-7.45%.


Rates on three-month certificates of deposit rose to 7.20-7.45% as against 7.15-7.40% on Tuesday.


Meanwhile, banks did not issue any CDs today as there was no immediate need for funds.


–Secondary market

* Bank of Maharashtra’s CD maturing on February was dealt five times at a weighted average yield of 7.0093%

* Housing Development Finance Corp’s CP maturing on Feb 24 was dealt at a weighted average yield of 6.6906%


At 1630 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 Vidhi Verma


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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