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Informist, Tuesday, Aug 27, 2024

By Richard Fargose

MUMBAI – Fundraising through commercial papers and certificates of deposits fell today as issuers were unwilling to borrow at elevated rates, dealers said. Companies raised CPs worth 9.50 bln rupees today, compared with 18.25 bln rupees raised on Monday, while there were no CD issuances today. 

"We have already seen a lot of issuances in the last two weeks, and rates are on a bit higher side now," a dealer at a large brokerage firm said. "Issuers are waiting for rates to cool down slightly."

The rise in issuances from banks and companies, mainly non-banking finance companies and brokerage firms, has pushed up rates of certificates of deposits and commercial papers by 10-15 basis points so far this month.

Last week, several companies tapped the market to refinance maturing papers and raise funds ahead of the festival season. CPs worth around 1.15 trln rupees were issued so far this month, 7% higher than the entire July. CPs worth over 1.25 trln rupees are due for maturity this month, they said.

CDs worth around 700 bln rupees were issued so far this month against papers due for maturity of around 600 bln rupees.

Most banks have raised their deposit rates amid rising competition and are increasingly relying on bulk term deposits and certificates of deposit to fund their asset growth.

Rates on three-month CPs issued by non-banking finance companies were steady at 7.60-7.65% and three-month papers issued by manufacturing companies remained unchanged at 7.25-7.30%. Rates on CDs maturing in three months were also unchanged at 7.15-7.20% today.

Aditya Birla Finance Ltd was the sole issuer today, raising 9.50 bln rupees through three-month and six-month commercial papers.

--Primary market

* Aditya Birla Finance Ltd raised funds through CPs.

* There were no issuances of CDs today.

--Secondary market

* HDFC Bank's CD maturing on Sep 4 was dealt three times at a weighted average yield of 6.9455%.

* National Bank for Agriculture and Rural Development's CP maturing on Tuesday was dealt four times at a weighted average yield of 6.4446%.

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 Saji George Titus

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