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Informist, Friday, Sep 27, 2024

By Richard Fargose and Vidhushi RajPurohit

MUMBAI – The activity in the short-term debt market was largely muted as both most banks and companies have met their funding needs ahead of the quarter end, dealers said. "It is quarter-end, most of the issuers have already raised funds to refinance their maturing papers for this month," a dealer with a brokerage firm said. "October will be the month with multiple value dates, as issuers will enter the market to raise funds against the maturity amount."

The rates on commercial papers and certificates of deposits remained steady as primary market issuances were muted, dealers said. "It is usual for the market to be at a somewhat settled state as the quarter end approaches," a dealer with a state-owned bank said. Rates on three-month CDs were quoted at 7.25-7.30%, unchanged from Thursday.

The issuance of CDs dropped to 6.5 bln rupees today, as against 30.5 bln rupees raised the previous day. Kotak Mahindra Bank was the largest issuer today as it raised 5 bln rupees through a three-month paper at 7.25%. HDFC Bank raised 1.5 bln rupees through a one-year CD at 7.65%. "Banks had already issued CDs at the start of this month, to fund their maturing papers," a dealer with another state-owned bank said. "During the early weeks of this month, the market saw a high number of CD issuances, it will resume again once the quarter-end period is over." 

So far this month, banks have issued CDs amounting to 1.42 trln rupees, higher than the maturity amount of 1.09 trln rupees. Canara Bank was the largest issuer this month, raising 282 bln rupees against the maturity amount of 148 bln rupees. HDFC Banks also issued CDs totalling more than its maturity due for this month. It raised 154.7 bln rupees against 147.15 bln rupees which was due for maturity this month. 

Rates on CPs also remained unchanged as there no issuances today. CPs issued by non-banking financial companies with three months maturity were at 7.55-7.60%, while papers of similar maturity for manufacturing companies were at 7.30-7.35%. 

Issuance of CPs this month has largely remained muted with companies raising 1.19 trln rupees, against the maturity amount of 2 trln rupees. Dealers attributed the reduced participation in CP issuances to low demand from non-banking financial companies. The market expects CP issuances to rise as the festival season will revive the demand for funds.    

--Primary market

* Kotak Mahindra Bank and HDFC Bank raised funds through CDs.

--Secondary market

* Export and Import Bank of India's CD maturing on Mar 24 was dealt two times at a weighted average yield of 7.4341%
* Century Textiles and Industries' CP maturing on Sep 30 was dealt two times at a weighted average yield of 6.8537%

At 1630 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:

NOTE: Details of the deals have been received from market sources.

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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