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Informist, Monday, Oct. 28, 2024

By Richard Fargose

MUMBAI - Primary issuances in the short-term debt market remained low on Monday due to muted demand for funds from companies and banks towards the month-end, dealers said. "This is a truncated (trading) week, and most banks and companies have already raised funds for festive needs," said a dealer 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 Friday. 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 rose slightly from Friday, but overall remained subdued. Only two companies issued CPs on Monday. Godrej Industries raised INR 2.25 billion from a three-month paper at 7.30%, while Sundaram Finance issued July maturity paper worth INR 2 billion for 7.75%.

There were no CD issuances as banks cited low requirements. Dealers said the inflows from the government on account of month-end spending have started, and liquidity surplus will rise steadily this week. The surplus liquidity on Sunday was at INR 639.77 billion, against INR 489.07 billion on Friday.

CD issuances have been subdued this month owing to the low redemption amount of INR 649.80 billion, dealers said. 

--Primary market

* Godrej Industries and Sundaram Finance raised funds through CP.

--Secondary market

* Bank of Baroda's CD maturing on Tuesday was dealt five times at a weighted average yield of 6.5347%.
* L&T Finance's CP maturing on Tuesday was dealt three times at a weighted average yield of 6.5347%.

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 Vandana Hingorani

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