Informist, Monday, May 30, 2022
By Vishal Sangani
MUMBAI – Issuances of commercial papers rose today due to firm demand from mutual funds, dealers said. Mutual funds have seen continuous inflow into liquid funds, which are then deployed in short-term debt papers. They are also reinvesting the funds received from the maturity of short-term papers.
So far today, CPs aggregating 39.25 bln rupees were issued, as against 31.00 bln rupees on Friday. Chambal Fertilisers and Chemicals was the major issuer, raising 11.00 bln rupees through papers maturing in three-month at 5.32%.
As the market is not seeing too many issuances of certificates of deposit, investors are parking funds in CPs instead of keeping them idle, said market participants.
Companies also issued CPs today either to roll over papers nearing maturity or to meet their working capital needs, dealers said.
Rates on short-term debt papers were in a narrow range as there are no major events that could have a significant impact on the market.
Rates on three-month CPs of non-bank finance companies were quoted at 5.40-5.70%, while those on papers of manufacturing companies were quoted at 5.20-5.40%.
Rates on three-month CDs were quoted at 5.05-5.25%.
On the other hand, banks did not issue any certificate of deposit today as there is no immediate need for funds.
On Friday, Federal Bank, the lone issuer, raised 5.00 bln rupees through CDs.
Liquidity in the banking system is currently estimated to be in a surplus of over 3.14 trln rupees as against 3.10 trln rupees on Friday.
The surplus is expected to widen in the coming days on account of the government’s month-end spending in the form of salaries and pension payouts.
–Primary market
* Chambal Fertilisers and Chemicals, Tata Power Co, Axis Finance, Tata Motors Finance, Godrej Industries, Aditya Birla Finance and L&T Finance raised funds through CPs.
–Secondary market
* Axis Bank’s CD maturing on Aug 29 was dealt five times at a weighted average yield of 5.1575%
* Hero Fincorp’s CP maturing on Aug 29 was dealt at a weighted average yield of 5.4700%
At 1530 IST, the 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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