Informist, Wednesday, Jun 29, 2022
By Vishal Sangani
MUMBAI – Aditya Birla Housing Finance Ltd was the lone issuer of commercial papers today, raising 3 bln rupees through papers maturing in one-month at 5.20%.
On Tuesday, there was no issuance of commercial papers by any company.
Issuance of CPs remained low in the primary market because companies were not in immediate need for funds, dealers said.
Capital raising by some companies has declined as they have rolled over papers set to mature in the next few days.
A few issuers also remained on the sidelines after completing their quarter-end borrowings. Participation was low because of a few rollovers in the primary market.
Demand from mutual funds has slowed, as most have completed refinancing of investments that have matured, dealers said.
On the other hand, a few banks tapped the short-term debt market to raise funds through issuance of certificates of deposit to meet their quarter-end funding needs, dealers said.
Typically, banks raise funds towards the end of every quarter to meet quarter-end requirements and boost balance sheets.
So far, CDs worth 20.50 bln rupees were issued today, as against 30.00 bln rupees on Tuesday. Punjab National Bank was the major issuer, raising 10.50 bln rupees through papers maturing on Aug 8 at 5.11%.
Volumes of CDs fell today in the absence of big-ticket issuances and improvement in surplus liquidity.
Liquidity in the banking system is currently estimated to be in a surplus of over 2.36 trln rupees as against 2.16 trln rupees on Tuesday.
The surplus is expected to widen further in the coming days on account of the government’s month-end spending in the form of salaries and pension payouts.
Rates on short-term debt securities were unchanged due to lower issuances and lack of significant triggers, dealers said.
Rates on three-month CPs of non-bank finance companies were quoted at 5.55-5.80%, while those on papers of manufacturing companies were quoted at 5.35-5.65%.
Rates on three-month certificates of deposit were quoted at 5.20-5.45%.
–Primary market
* Punjab National Bank and HDFC Bank raised funds through CDs.
–Secondary market
* Canara Bank’s CD maturing on Jul 8 was dealt two times at a weighted average yield of 4.9213%
* National Housing Bank’s CP maturing on Friday was dealt three times at a weighted average yield of 4.8923%
At 1530 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:
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 Vandana Hingorani
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