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Informist, Wednesday, Jan. 1, 2025

By Kabir Sharma

MUMBAI – The short-term debt market was virtually inactive on Wednesday as most market participants were on leave on account of the New Year, dealers said. "Most people are not in the office today (Wednesday), so there were no issuances. The market will pick up only from Monday," a dealer at a brokerage firm said.

For the second straight day, no certificates of deposit were issued on Wednesday. Activity was low in the commercial paper market, with Godrej Industries being the sole issuer, raising INR 1.50 billion at 7.60% via a three-month paper.

Dealers said rates are likely to remain on the higher side due to tight liquidity conditions in the banking system. While Tuesday saw some narrowing of the liquidity deficit on the back of the government's month-end spending--the Reserve Bank of India injected a net INR 1.32 trillion compared to INR 2.06 trillion on Monday--dealers said the improvement was temporary.

Rates in the short-term debt market are expected to remain high going forward after the cut-off on the government's 91-day Treasury bill at Wednesday's auction was higher compared to last week, dealers said. "The T-bill cut-off was 5 basis points higher than last week's so that will impact rates in the market as well," a dealer at a brokerage said. The cut-off yield at the 91-day T-bill auction on Wednesday was 6.5961%, up from 6.5489% on Dec. 26.

--Primary market

* Godrej Industries raised funds through CPs.

* No CDs were issued.

--Secondary market

* Axis Bank's CD maturing on Jan. 31 was dealt four times at a weighted average yield of 7.1495%.
* Reliance Industries' CP maturing on Feb. 3 was traded once at a weighted average yield of 7.0998%.

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed by the Clearing Corp. of India's F-TRAC platform: 

End

Edited by Saji George Titus

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