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

Informist, Thursday, Apr 20, 2023


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.


The financial institution tapped the market to meet their funding requirements, dealers said.


So far today, CPs aggregating 58.50 bln rupees were issued, against 12.50 bln rupees on Wednesday. Small Industries Development Bank of India raised 50 bln rupees through papers maturing in three months at 7.05%.


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


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


Rates on short-term debt papers were in a narrow-range because of steady demand from mutual funds, dealers said.


Demand from mutual funds was steady as they are reinvesting the funds received from maturity of short-term papers, and lower issuances of such papers are forcing them to invest at lower rates.


Rates on three-month CPs issued by non-banking finance companies were quoted at 7.25-7.45%, while rates on papers of manufacturing companies were quoted at 7.05-7.30%.


Rates on three-month certificates of deposit were quoted at 7.00-7.20%.


Small Industries Development Bank of India was the lone issuer of CDs today, raising 25 bln rupees at 7.50% through papers maturing in one-year.


On the other hand, banks did not issue any CDs today as there is no immediate need for funds.


Liquidity in the banking system is currently estimated to be in a surplus of 1.73 trln rupees, down from 1.89 trln rupees on Wednesday. The surplus may narrow further in coming days due to outflows on account of goods and services tax payments, which will begin today, dealers said.


–Primary market

* NLC TamilNadu Power, Birla Group Holdings, LIC Housing Finance and Small Industries Development Bank of India raised funds through CPs.


–Secondary market

* Punjab National Bank’s CD maturing on May 18 was dealt two times at a weighted average yield of 6.8201%

* Reliance Retail Ventures’ CP maturing on Jun 23 was dealt four times at a weighted average yield of 6.9199%


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 Maheswaran Parameswaran


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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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