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Short-Term Debt: CP issuances up as NBFCs rush to raise funds

Informist, Thursday, Aug 17, 2023


By Asmita Patil


MUMBAI – Fundraising through commercial papers rose today as major non-banking finance companies flocked to the short-term debt market because of a sharp fall in surplus liquidity in the banking system, dealers said.


So far today, companies and financial institutions have raised 55.5 bln rupees through CPs, against 7 bln rupees on Monday. Bajaj Finance was the largest issuer, raising around 32 bln rupees through papers maturing in three months at 7.30%.


Liquidity in the banking system at the start of the day was estimated to be in a surplus of 208.22 bln rupees compared with 1.84 trln rupees on Monday.


“Liquidity has come down sharply after the announcement of incremental CRR…I think the market will remain at these levels for some time now,” a dealer at a mid-sized brokerage firm said. 


The Reserve Bank of India on Aug 10 imposed an incremental cash reserve ratio of 10% on increase in scheduled banks’ net demand and time liabilities between May 19 and Jul 28. The RBI’s move has resulted in withdrawal of over 1 trln rupees from the banking system from the fortnight starting Aug 12, dealers said.


Rates on three-month commercial papers issued by non-banking financial companies were quoted at 7.20-7.40%, and rates on papers of manufacturing companies were at 7.10-7.30%.


Rates on three-month certificates of deposit were quoted at 7.00-7.20%. Canara Bank was the sole issuer of CDs, raising 25 bln rupees through papers maturing in three months at 7.05%.


–Primary market

* Kotak Securities, ICICI Securities, ICICI Home Finance, Bajaj Finance, L&T Metro Rail (Hyderabad), Hero Fincorp, Birla Group Holdings, and Bajaj Housing Finance raised funds through CPs. 

* Canara Bank raised funds through CDs. 


–Secondary market

* Bank of Maharashtra’s CD maturing on Aug 25 was dealt twice at a weighted average yield of 7.0508%

* Aditya Birla Finance’s CP maturing on Friday was dealt twice at a weighted average yield of 6.6077%


At 1725 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.




Edited by Ashish Shirke


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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