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Informist, Friday, Aug 23, 2024

By Richard Fargose

MUMBAI – Rates on commercial papers and certificates of deposits rose today in the primary segment owing to firm issuances of such instruments, dealers said.

Rates on three-month CP issued by non-banking finance companies were steady at 7.55-7.60%, but those on paper of similar maturities issued by manufacturing companies rose 5 basis points to 7.25-7.30%. Rates on CDs maturing in three months also inched higher to 7.20-7.25% today from 7.15-7.20% in the previous session.

So far today, CPs worth 31.25 bln rupees were issued, compared with 5 bln rupees issued on Thursday.

Mahindra & Mahindra Financial Services Ltd was the largest issuer today, raising 21 bln rupees through three-month papers at 7.60%.

This week, several companies tapped the market to refinance maturing papers and raise funds ahead of the festival season.

The Reserve Bank of India's August bulletin said that CP issuances increased to 4.86 trln rupees till Jul 31 from Apr 1, surpassing 4.72 trln rupees in the corresponding period of the previous year, driven by NBFCs' higher borrowings in the CP market.

Today, Indian Bank raised 10 bln rupees through one-year CDs at 7.63% and Bank of Maharashtra raised 4 bln rupees through three-month papers at 7.25%.

CP and CD issuances remained high as banks and companies borrowed for fund rollovers, dealers said. CPs worth over 1.25 trln rupees and CDs of over 600 bln rupees are due for maturity this month, they said.

From Apr 1-Aug 20, CD issuances amounted to 3.77 trln rupees. Almost 66% higher compared with 2.28 trln rupees issuances in the corresponding period in the previous fiscal year.

--Primary market

* Mahindra & Mahindra Financial Services, TVS Credit Services, Larsen & Toubro, Tata Capital, and Godrej industries raised funds through CPs.

* Indian Bank, and Bank of Maharashtra funds via CDs.

--Secondary market

* Bank of Baroda's CD maturing on Sep 9 was dealt twice at a weighted average yield of 6.8991%.

* National Bank for Agriculture and Rural Development’s CP of maturing Monday was dealt thrice at a weighted average yield of 6.4601%.

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

Edited by Akul Nishant Akhoury

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