Informist, Thursday, May 4, 2023
By Vishal Sangani
MUMBAI – Fundraising through commercial papers was steady today as companies tapped the market to meet their funding needs and to roll over papers set to mature in the coming days, dealers said. The major issuers were non-banking finance companies, which tapped the market for their credit disbursement.
So far today, CPs aggregating 36.75 bln rupees were issued as against 35.00 bln rupees on Wednesday. Small Industries Development Bank of India was the major issuer, raising 5 bln rupees through papers maturing in three months at 7.17%.
On Wednesday, Reliance Retail Ventures Ltd was the only issuer, and had raised 35 bln rupees through CPs.
Some market participants also avoided placing large bets in a curtailed trading week, dealers said. Indian money markets will be shut on Friday on account of Buddha Purnima.
Rates on short-term debt instruments moved in a narrow range amid steady demand from mutual funds, dealers said.
There is a steady inflow in liquid funds of mutual funds, which they are deploying in such papers. They are also reinvesting the funds received from maturity of short-term papers.
Rates on three-month CPs issued by non-banking finance companies quoted at 7.35-7.55%, while those on papers of manufacturing companies quoted at 7.20-7.45%.
Rates on three-month certificates of deposit quoted at 7.10-7.30%.
On the other hand, banks did not issue any certificates of deposit today as there is no immediate need for funds and also due to surplus liquidity in the banking system.
Liquidity in the banking system is currently estimated to be in a surplus of 701.06 bln rupees, up from 560.02 bln rupees on Wednesday. The liquidity surplus has widened due to inflows on account of the government’s month-end spending.
–Primary market
* Aditya Birla Fashion and Retail, Birla Group Holdings, Motilal Oswal Finvest, Aditya Birla Finance, Small Industries Development Bank of India, L&T Metro Rail (Hyderabad), Godrej Industries and ONGC Petro additions raised funds through CPs.
–Secondary market
* Punjab National Bank’s CD maturing on May 18 was dealt four times at a weighted average yield of 7.1037%
* HDFC Securities’ CP maturing on May 8 was dealt two times at a weighted average yield of 6.8489%
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:
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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