Informist, Friday, May 12, 2023
By Vishal Sangani
MUMBAI – Issuances of commercial papers crossed the 100-bln-rupee mark today, primarily because of large deals by Small Industries Development Bank of India and Bajaj Finance.
The financial institution and non-banking finance company tapped the market to meet fresh capital requirements and to roll over papers set to mature in the coming days, dealers said.
A few non-banking finance companies also raised funds to meet their credit disbursement requirement.
So far today, CPs aggregating 105.25 bln rupees were issued, against 22.50 bln rupees on Thursday. Small Industries Development Bank of India was the major issuer, raising 58.50 bln rupees through papers maturing in three months at 7.20%.
Bajaj Finance raised 20 bln rupees through papers maturing in three months at 7.30%.
The supply of papers by big-ticket issuers was readily absorbed because of their low risk profile.
CP issuances by state-owned companies were subdued because they remained on the sidelines as they weren’t in immediate need of funds.
Despite surge in issuances, rates on short-term debt papers were in a narrow range due to steady demand from mutual funds and prevailing surplus liquidity in the banking system, 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 were quoted at 7.40-7.60%, while rates on papers of manufacturing companies increased were quoted at 7.25-7.50%.
Rates on three-month certificates of deposit were quoted at 7.15-7.35%.
Liquidity in the banking system is currently estimated to be in a surplus of 538.99 bln rupees.
On the other hand, issuances of certificates of deposit increased today as IDFC First Bank and Bank of Maharashtra tapped the market to meet capital requirements for funds.
CDs aggregating 31 bln rupees were issued, against nil on Thursday. Bank of Maharashtra was the major issuer, raising 21 bln rupees through papers maturing in three months at 7.30%.
–Primary market
* Small Industries Development Bank of India, Godrej & Boyce, Tata Motors Finance, Tata Motors Finance Holdings, Aditya Birla Finance and Bajaj Finance raised funds through CPs.
–Secondary market
* Federal Bank’s CD maturing on Feb 17 was dealt two times at a weighted average yield of 7.1025%
* HDFC Securities’ CP maturing on Monday was dealt twice at a weighted average yield of 6.9024%
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 Maheswaran Parameswaran
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