More Stories

Informist, Wednesday, Aug 28, 2024

By Richard Fargose

MUMBAI – Funds raised through commercial paper remained low today as borrowers continued to be on the sidelines waiting for rates to ease, dealers said. Companies raised CPs worth 14.50 bln rupees today, as against 9.50 bln rupees on Tuesday. Issuances of short-term debt instruments were down this week as issuers were unwilling to borrow funds at elevated rates.

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 this month.

Kotak Securities and Motilal Oswal Financial Services were the major issuers today, raising 5 bln rupees each through CPs maturing in three months at 7.74% and 8.03%, respectively.

Rates on short-term debt instruments remained steady today amid subdued activity, dealers said. Rates on three-month CPs issued by non-banking finance companies were flat at 7.60-7.65%, and rates on CPs of similar maturity issued by manufacturing companies were also flat at 7.25-7.30%.

"Issuers are expecting some fall in rates as month-end spending from the government will improve liquidity further," said a dealer at a mid-sized brokerage firm.

According to RBI data, the liquidity surplus in the banking system widened to 1.04 trln rupees on Tuesday against 822.35 bln rupees on Monday. Market participants attributed the 200 bln rupees increase in surplus to partial inflow through the government's month-end spending.

Rates on CDs maturing in three months also remained unchanged at 7.20-7.25% today. IDFC FIRST Bank was the sole CD issuer today, raising 10 bln rupees, compared with no issuances on Tuesday.

--Primary market

* Kotak Securities, Motilal Oswal Financial Services, LIC Housing Finance, and Aditya Birla Fashion and Retail raised funds through CPs.

* IDFC FIRST Bank raised funds via CDs today.

--Secondary market

* Bank of India's CD maturing on Monday was dealt twice at a weighted average yield of 6.8977%.

* Reliance Retail Ventures’ CP maturing on Friday was dealt six times at a weighted average yield of 6.9897%.

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 

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 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.