Informist, Tuesday, Mar 22, 2022
By Vishal Sangani
MUMBAI – Large issuances by Indian Oil Corp Ltd and Reliance Jio Infocomm Ltd led to a spike in funds raised through commercial papers today.
So far today, CPs aggregating 31.00 bln rupees were issued, as against 1.25 bln rupees sold on Monday. Indian Oil Corp Ltd and Reliance Jio Infocomm raised 15.0 bln rupees each through CPs.
The supply of fresh commercial papers is low because of uncertainty in the market amid Russia-Ukraine war. So, companies are only tapping the market if they require funds, a dealer said.
Some companies preferred to redeem their papers nearing maturity instead of rolling them over due to low requirement for funds.
Demand from mutual funds for CPs is also low as they are facing redemption pressure due to fund requirements from institutional investors as the financial year comes to a close.
Companies usually park their money in liquid schemes to meet their short-term fund requirements rather than leave cash idle. This results in sharp inflows and outflows on a cyclical basis.
Today, Bharat Heavy Electricals Ltd and Chennai Petroleum Corp Ltd scrapped their plans to raise funds through CPs as the bid rates they received were higher than what the companies were willing to pay, dealers said.
Meanwhile, banks did not issue any certificate of deposit today as there is no immediate need for funds amid an absence of big-ticket issuances, dealers said
On Monday, CDs worth 80.00 bln rupees were issued.
Rates on short-term debt securities remained in a narrow range due to lack of significant triggers.
Rates on three-month CPs of manufacturing companies were quoted at 4.05-4.20%, while those on papers of non-bank finance companies were quoted at 4.30-4.55%.
Rates on three-month CDs were at 3.95-4.15%.
–Primary market
* Indian Oil Corp, Tata Capital Financial Services and Reliance Jio Infocomm raised funds through CPs.
–Secondary market
* IndusInd Bank’s CD maturing on Jun 15 was dealt at a weighted average yield of 4.1202%
* Reliance Jio Infocomm’s CP maturing on Jun 17 was dealt four times at a weighted average yield of 4.5066%
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 Vidhi Verma
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