Informist, Friday, May 26, 2023
By Vishal Sangani
MUMBAI – Punjab & Sind Bank was the lone issuer of certificates of deposit today, raising 20 bln rupees at 7.18% through papers maturing in three months. The state-owned bank tapped the market to meet fresh capital requirements for funds, dealers said.
Most banks remained on the sideline 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 806.14 bln rupees, up from 496.35 bln rupees on Thursday. The surplus widened due to some inflows on account of the government’s spending, dealers said.
The liquidity surplus may widen further in the coming days due to inflows on account of the government’s month-end spending in the form of salaries and pension payouts.
On the other hand, issuances of commercial papers were marginally down today because most companies remained on the sidelines as they weren’t in immediate need of funds and also because there were a few rollovers in the primary market.
Issuers also remained on the sidelines after completing their month-end borrowings, dealers said.
So far today, CPs aggregating 15.25 bln rupees were issued, against 19.75 bln rupees on Thursday. Birla Group Holdings was the biggest issuer, raising 10 bln rupees through papers maturing in three months at 7.50%.
Some companies tapped the market to meet their funding requirements and to roll over papers set to mature in the coming days.
Rates on short-term debt papers were unchanged due to lower issuances.
Rates on three-month CPs issued by non-banking finance companies were quoted at 7.20-7.35%, while rates on papers of manufacturing companies were quoted at 7.05-7.25%.
Rates on three-month CDs were quoted at 6.90-7.10%.
Market participants expect rates on short-term debt paper to stay in a narrow range in coming days as there is no major event which can have significant impact on rates.
–Primary market
* Blue Star, Birla Group Holdings, Godrej Industries, and TVS Credit Services rasied funds through CPs.
–Secondary market
* Indian Bank’s CD maturing on Jun 9 was dealt three times at a weighted average yield of 6.6993%
* Hindustan Zinc’s CP maturing on Sep 4 was dealt at a weighted average yield of 7.4998%
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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