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Short-Term Debt: CP amount a tad up on big-ticket issuance by NABARD

Informist, Thursday, Oct 12, 2023


By Sony

MUMBAI – Fundraising through commercial papers rose today due to big ticket issuances by National Bank for Agriculture and Rural Development, dealers said.


So far, companies and financial institutions have raised 49 bln rupees through CPs, as against 40.25 bln rupees on Wednesday. Of the total funds raised, National Bank for Agriculture and Rural Development mobilised 28 bln rupees through papers maturing in three months at 7.18%.  


Rates on three-month commercial papers issued by non-banking financial companies were flat at

7.55-7.75%. Rates on papers of similar maturity issued by manufacturing companies were also flat at 7.20-7.40%.


Rates on three-month certificates of deposit rose slightly to 7.15-7.35% from 7.12-7.32% on Wednesday, dealers said. Canara Bank was the sole issuer of CDs, raising 12 bln rupees through papers maturing in three months at 7.18%. 


Liquidity deficit in the banking system is expected to keep rates on short-term instruments high, dealers said. 


“Liquidity is expected to remain tight unless the market gets clarity from the Reserve Bank of India regarding the liquidity conditions,” a dealer with a brokerage firm said. 


At the start of trade today, liquidity in the banking system was estimated to be in a deficit of 504.87 bln rupees, against 418.84 bln rupees on Wednesday.


Liquidity slumped into deficit due to a likely intervention by the Reserve Bank of India in the foreign exchange market, dealers said.


–Primary market

* National Bank for Agriculture and Rural Development, Axis Finance, Bajaj Finance, Tata Motors Finance Solutions, Pilani Investment and Industries Corp and Axis Securities raised funds through CPs.

* Canara Bank raised funds through CDs.


–Secondary market
* Union Bank of India’s CD maturing on Jan 10 was dealt five times at a weighted average yield of 7.1699%.
* Reliance Retail Ventures’s CP maturing on Oct 27 was dealt at a weighted average yield of 6.9989%.


At 1700 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 Vandana Hingorani


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Source: Cogencis

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