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Informist, Thursday, Oct. 17, 2024

By Vidhushi RajPurohit and Richard Fargose

MUMBAI – The issuances in the three-month segment of the short-term debt market remained muted on Thursday but the big-ticket issuance by Small Industries Development Bank of India in the one-year segment pushed the rates slightly higher, dealers said.

The one-year CDs were quoted at 7.50-7.55%, up 5 basis points from 7.45-7.50% on Wednesday. The rates of CD in the three-month segment remained unchanged at 7.15-7.20%. 

After remaining muted for two consecutive days, issuance of certificates of deposit picked up Thursday with SIDBI raising INR 23 billion through a one-year paper at 7.58%. However, others continued to remain on the sidelines. "The fall in CD issuances, compared to September, is an expected trend observed during every quarter start," a dealer with a private bank said. Compared with the total CD issuances of INR 1.45 trillion in September, banks have issued CDs worth INR 459.45 billion so far in October.

On Thursday, INR 30 billion was raised through CPs, compared with INR 35 billion on Wednesday. Export-Import Bank of India and Reliance Retail Ventures were the only issuers. Export-Import Bank of India raised INR 15 billion at 7.40% for papers maturing in May, while Reliance Retail Ventures raised INR 15 billion at 7.12% for papers maturing on Dec. 20. 

The rates on three-month papers issued by non-banking financial companies were quoted at 7.45-7.50% on Thursday, unchanged from the previous day. The rates on papers of similar maturity issued by manufacturing companies were also unchanged at 7.20-7.25%. The rates on six-month papers issued by manufacturing companies fell 5 bps to 7.40-7.45%.

"The issuances were on the active side as few companies raised significant amounts," a dealer with a brokerage firm said. "For October, the issuance will likely stay in the same range, and they will pick up in November-December as issuers will need funds for the festive months."  

The volumes in the secondary market picked up as both banks and mutual funds have adequate funds, dealers said. The banking system liquidity was in a surplus of INR 1.80 trillion on Wednesday, the Reserve Bank of India data showed. The volume of CDs traded in the secondary market rose to INR 84.25 billion from INR 62.20 billion. CP volumes increased to INR 44.70 billion from INR 25.35 billion.

--Primary market

* Small Industries Development Bank of India raised funds through CDs.

* Export-Import Bank of India and Reliance Retail Ventures raised funds through CPs.

--Secondary market

* Small Industries Development Bank of India's CD maturing Jan. 16 was dealt nine times at a weighted average yield of 7.1900%.
* Panatone Finvest's CP maturing Jan. 16 was dealt three times at a weighted average yield of 7.6002%.

At 1700 IST, the following were the volumes, in INR billion, 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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