Informist, Thursday, Oct 27, 2022
By Vishal Sangani
MUMBAI – Rates on three-month commercial papers in the primary market rose today as the liquidity deficit in the banking system widened further, dealers said.
Rates on three-month CPs increased to 7.25-7.45% from 7.10-7.30% on Tuesday, while those on papers of manufacturing companies rose by 15 basis points to 7.10-7.35%.
Liquidity in the banking system is currently estimated to be in a deficit of over 732.97 bln rupees–the highest since April 2019–as against 628.36 bln rupees on Tuesday.
The liquidity deficit widened further due to payments for government bonds. Liquidity will tighten further due to higher credit demand and an increase in currency in circulation during the festival season, market participants said.
Domestic financial markets were closed on Wednesday on account of Balipratipada.
On the supply side, issuances of primary CPs were steady today, as a few companies tapped the market to roll over papers set to mature in the coming days, dealers said.
So far today, CPs aggregating 9.75 bln rupees were issued, against 10.00 bln rupees on Tuesday. Cholamandalam Investment & Finance Co was the major issuer, raising 5.00 bln rupees through papers maturing in three months at 7.30%.
Participation was low, as traders avoided placing large bets due to a truncated week.
A few companies that raised capital regularly from the market are keeping away due to the surge in rates, dealers said.
On the other hand, banks did not issue any certificates of deposit today as there was no immediate need for funds.
Rates on three-month CDs were quoted at 6.85-7.10%, in the secondary market.
–Primary market
* Sundaram Finance, Godrej Industries, National Fertilizers and Cholamandalam Investment & Finance Co raised funds through CPs.
–Secondary market
* Small Industries Development Bank of India’s CD maturing on Sep 12 was dealt four times at a weighted average yield of 7.4850%
* Reliance Retail Ventures’ CP maturing on Friday was dealt four times at a weighted average yield of 6.2426%
At 1530 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 Avishek Dutta
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Source: Cogencis
