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Informist, Wednesday, Jul 24, 2024

By Siddhi Chauhan

MUMBAI – Fundraising through commercial papers rose today, led by a big-ticket issuance from NTPC Ltd, which alone raised 31 bln rupees today. NTPC today raised funds through paper maturing on Oct 25 at a rate of 7.14%, dealers said. Fundraising through commercial papers today was at 85.75 bln rupees, as against 46 bln rupees on Tuesday.

HDFC Securities and Tata Motor Finance Ltd were the second-highest and the third-highest issuers today, respectively. HDFC Securities raised 15 bln rupees through CPs maturing in three months at a rate of 7.77. Meanwhile, Tata Motor Finance raised 10 bln rupees through paper maturing in 3 months at a rate of 7.75. 

Issuances through CPs rose today, aided by comfortable liquidity conditions and positive sentiment.

"There are no factors which may keep traders from trading aggressively, the Budget also did not have anything negative," a dealer at a mid-sized brokerage firm said. "Liquidity is also supportive right now."

While there was significant demand from mutual funds in the primary market, they were seen selling papers maturing in July and August to banks in the secondary market, dealers said.

"I think during the time of goods and services tax outflows, corporates generally redeem their holdings in the funds," a dealer at a private bank said.

The liquidity surplus in the banking system was 423.74 bln rupees on Tuesday against 387.57 bln rupees on Monday, data from the RBI showed. The outflows for goods and service tax drained around 1 trln to 1.5 trln rupees from the banking system, dealers said. 

Some sections of the market believed that mutual funds sold papers in the secondary market to fund their primary market purchases. 

Meanwhile, issuances through certificates of deposit recorded only a minor change from the previous day's figures. Issuances through certificates of deposits fell marginally to 26 bln rupees from 28.50 bln rupees the previous day. 

HDFC Bank and Punjab National Bank were the only issuers today. HDFC Bank issued 13 bln rupees through CDs maturing in 3 months at a rate of 7.14%. Punjab National Bank also issued the same amount through paper maturing in March at a rate of 7.41. These banks tapped the short-term debt market with a view to meet funding requirements for papers maturing in the coming days, dealers said.

Rates on three-month CPs were flat 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

* Mahindra and Mahindra, NTPC, Godrej and Boyce, CEAT, ICICI Securities, Tata Motor Finance, HDFC Securities, Axis Securities, Aditya Birla Finance, Birla Group Holdings, and Kotak Securities raised funds through CPs

* Punjab National Bank and HDFC Bank raised funds through CDs

--Secondary market

*Axis Bank's CD maturing on Aug 9 was dealt six at a weighted average yield of 6.9078%.

*NTPC's CP maturing on Jul 29 was dealt four at a weighted average yield of 6.9606%.

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 Deepshikha bhardwaj

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