Informist, Thursday, Mar 3, 2022
By Vishal Sangani
MUMBAI – The issuances of certificates of deposit rose today as a few private sector banks and other financial institutions tapped the market to roll over papers set to mature in the coming days and to meet the fresh requirements for funds, dealers said.
So far today, CDs aggregating 117.45 bln rupees were issued, as against nil on Wednesday. HDFC Bank was the major issuer, raising 85.00 bln rupees in total through papers maturing in three months, six months and one year.
Private sector banks were the main issuers of CDs as demand for credit picked up due to an uptick in business activity.
According to the latest data from the Reserve Bank of India, advances in the Indian banking system were at 115.45 trln rupees as on Feb 11, up 7.9% on year.
National Bank for Agriculture and Rural Development was the lone issuer of commercial papers today, raising 20.00 bln rupees at 4.00% through papers maturing in three months, dealers said.
On Wednesday, CPs worth 62.50 bln rupees were issued.
The supply of fresh CPs is low because of the uncertainty in the market due to the current situation, so companies are only tapping the market if they require funds, a dealer with a company said.
Some companies preferred redeeming their papers nearing maturity instead of rolling them over due to low requirement for funds.
Funds raised by state-owned companies were also low as they have already rolled over papers that are set to mature in the next few days.
The rates on short-term debt papers were steady because of surplus liquidity in the banking system, dealers said.
Rates on three-month CPs of manufacturing companies were quoted at 4.00-4.15%, and those on papers of non-bank finance companies were quoted at 4.30-4.45%.
The rates on three-month CDs were quoted at 3.90-4.10%.
Liquidity in the banking system is currently estimated to be in a surplus of over 8.05 trln rupees as against 7.75 trln rupees on Wednesday. The surplus widened on account of inflows due to government spending towards salary and pension payments, dealers said.
–Primary market
* National Bank for Agriculture and Rural Development, IDFC First Bank and HDFC Bank raised funds through CDs.
–Secondary market
* IDFC First Bank’s CD maturing on Jun 9 was dealt three times at a weighted average yield of 4.2000%
* Tata Steel’s CP maturing on Mar 24 was dealt at a weighted average yield of 3.8008%
Following were the volumes at 1530 IST in the secondary market for short-term debt, in bln rupees, as detailed by the Clearing Corp of India’s F-TRAC platform:
NOTE: Details of the deals have been received from market sources.
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Michael Correya
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