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Informist, Friday, Oct. 25, 2024

By Vidhushi RajPurohit

MUMBAI – Issuances in the short-term debt market fell sharply Friday, with only one issuance reported during the day. Market participants attributed muted demand for funds towards the month-end as the reason for the low issuances. "Most banks and companies have already tapped the market to refinance the maturing papers, so now towards month-end it is expected that the issuances will be low," a fund manager with a mutual fund said.

Owing to subdued activity, the rates on short-term debt instruments remained steady. The rates on three-month certificates of deposit were at 7.15-7.20%, the same level as Thursday. The rates on three-month commercial papers issued by non-banking finance companies were 7.45-7.50%, unchanged from the previous day. The rates on CPs of similar maturity issued by manufacturing companies were also unchanged at 7.20-7.25%.

The issuance of CPs fell sharply to INR 1 billion from Thursday's INR 17 billion. Aditya Birla Housing Finance was the sole issuer of CP. The company raised INR 1 billion from a three-month paper at 7.28%. Among housing finance companies, Aditya Birla Housing Finance has a maturity amount of INR 2 billion but so far the company has already issued CPs totalling INR 5.25 billion. No other companies issued CPs.

There were no CD issuances as banks cited low requirement. On Thursday, only Bank of Baroda tapped the market to raise INR 4 billion. CD issuances have been subdued this month owing to the low redemption amount of INR 649.80 billion, dealers said. "The redemption amount is low and on top of that the high issuances in September also deterred many banks from borrowing aggressively in October," a dealer with a state-owned bank said. In September, banks had issued CDs totalling INR 1.45 trillion.

--Primary market

* Aditya Birla Housing Finance raised funds through CP.

--Secondary market

* Indian Bank's CD maturing on Nov. 18 was dealt three times at a weighted average yield of 7.0497%.
* Export-Import Bank of India's CP maturing on Nov. 12 was dealt seven times at a weighted average yield of 7.0342%.

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 Ashish Shirke

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