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Informist, Monday, Jul 15, 2024

By Siddhi Chauhan

MUMBAI – Fundraising through certificates of deposit rose today on account of a big ticket issuance by HDFC Bank, dealers said. HDFC Bank raised 37.50 bln rupees through CDs maturing in three months at 7.14%. 

Today, banks raised a total of 47.50 bln rupees compared with 37 bln rupees on Friday. "HDFC borrowed because the maturity of many CDs of three and six months maturities are lined up," a dealer at a state-owned bank said. "HDFC is quite active in the short-term debt market so they would have done this to meet their borrowing requirements." 

Apart from HDFC Bank, Federal Bank raised 10 bln rupees through CDs maturing in six months at a rate of 7.53%. On Friday, IDFC First Bank was the major issuer, raising 20 bln rupees through papers maturing in three months at a 7.18%.

A similar trend was seen in borrowing through commercial papers as well. The presence of big-ticket issuers boosted overall funds raised through CPs, dealers said. Today, companies and financial institutions raised over 36 bln rupees through CPs against 5.5 bln rupees on Friday.

National Bank for Agriculture and Rural Development was the largest issuer today, raising 23.25 bln rupees through CPs maturing in two months at 7.03%. HDFC Securities raised 4 bln rupees through CPs maturing in three months at 7.78%. 

Rates on short-term debt instruments remained largely steady due to muted demand from mutual funds, dealers said. Rates on three-month CPs issued by non-banking finance companies were quoted at 7.70-7.85%, while those of similar maturity issued by manufacturing companies were at 7.17-7.37%. Rates on CDs were quoted at 7.10-7.30%.

--Primary market

* UltraTech Cement, NABARD, Kotak Securities, HDFC Securities, Pilani Investments, Bajaj Finance, and Godrej Agrovet raised funds through CPs

* HDFC Bank and Federal Bank raised funds through CDs

--Secondary market

* Bank of Baroda's CD maturing on Aug 23 was dealt thrice at a weighted average yield of 6.9003%.

* L&T Finance's CP maturing on Sep 26 was dealt thrice at a weighted average yield of 7.5500%.

At 1700 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:

End

With Inputs from Sachi Pandey

Edited by Saji George Titus

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