More Stories

Informist, Thursday, Sep 5, 2024

By Siddhi Chauhan

MUMBAI – Borrowing through certificates of deposits rose today as banks borrowed funds to finance maturities of papers due this month, dealers said. Issuances through CDs rose to 92 bln rupees from 55.50 bln rupees on Wednesday. 

Canara Bank raised 36 bln rupees through CDs maturing in three months at a rate of 7.24%, while Bank of Baroda raised the same amount through papers maturing in three months at 7.24%. The remaining 20 bln rupees was raised by Union Bank through CDs maturing in a month at 7.15%. 

On Wednesday, Indian Bank, Bank of Baroda and State Bank of India tapped the short-term debt market. Indian Bank raised 39 bln rupees through papers maturing in three months at 7.24%, while Bank of Baroda raised 12.50 bln rupees through three-month papers at 7.21%. State Bank of India, which is not a frequent issuer, raised 4 bln rupees through papers maturing in three months at 7.15%.

"There were many issuances through CDs today. This is because there are a lot of maturities in the month," a dealer at a state-owned bank said. "This is why we are also seeing a lot of activity in the secondary market as well."

In the secondary market, many banks were seen selling papers that are set to mature this week and buying three-month papers in the primary market. This was also reflected in volumes in the secondary market, dealers said. 

On the other hand, issuances of commercial papers fell to 9.50 bln rupees today after topping 100 bln rupees for three consecutive days. Today's amount was cumulatively raised by Axis Finance, Larsen and Tourbo and Aditya Birla Finance. Borrowing through CPs was tepid today due to lack of big-ticket issuances, dealers said. 

While Larsen and Toubro raised 4.50 bln rupees through CPs maturing in three months at 7.25%, Aditya Birla Finance raised 3.50 bln rupees through CPs maturing in three months at 7.64%. 

"You would have seen that CP issuances were quite good in the previous days, right?," a dealer at a mid-sized brokerage firm said. "The ones who wanted to borrow funds have done so already. Now, it seems that the requirement is not there." 

On Thursday, Export and Import Bank alone raised 50 bln rupees through CPs maturing in three months at 7.24%, while Reliance Retail Ventures raised 25 bln rupees through CPs maturing in three months at 7.27%.  

Rates on three-month CPs issued by non-banking finance companies were steady at 7.60-7.65%, and those on papers of similar maturities issued by manufacturing companies were unchanged at 7.25-7.30%. Rates on CDs maturing in three months were at 7.20-7.25%.

--Primary market

* Larsen and Toubro, Aditya Birla Finance Ltd, and Axis Finance Ltd raised funds through CPs.

* Bank of Baroda, Union Bank, and Canara Bank raised funds via CDs.

--Secondary market

* Punjab National Bank's CD maturing on Dec 5 was dealt 11 times at a weighted average yield of 7.2413%.

* Reliance Retail Ventures Ltd's CP maturing on Friday was dealt five times at a weighted average yield of 6.3709%.

At 1700 IST, the following were the volumes, in bln rupees, in the secondary market for short-term debt, as detailed by Clearing Corp of India's F-TRAC platform:

End

With inputs from Sachi Pandey

Edited by Avishek Dutta

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.