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Informist, Monday, Jan. 13, 2025

By Siddhi Chauhan

MUMBAI – Borrowings through commercial paper rose on Monday as issuers raised funds ahead of upcoming redemptions, dealers said. On Monday, CPs worth INR 25.75 billion were raised against INR 3 billion on Friday. 

According to Informist data, CPs worth INR 879.29 billion are set to mature in January. On Monday, Godrej Consumer Products raised INR 2.5 billion through a paper maturing in March at 7.31% and Godrej Industries raised INR 2.25 billion through a three-month paper at 7.90%. Godrej Consumer Products and Godrej Industries have redemptions of INR 8.5 billion and INR 12 billion, respectively, in January. 

SBI Capital Securities was the largest issuer of CPs on Monday, raising INR 8.00 billion through paper maturing in March at 7.85%.  

"Despite elevated (CP) rates, there were CP issuances today (Monday) due to maturities which are lined up for this month," a dealer at a brokerage firm said. "Most of the issuers who have tapped the market today have done so in order to finance that only." 

The rates on the three-month CPs issued by manufacturing companies were at 7.55-7.60%, flat versus Friday, dealers said. Rates on similar-maturity CPs issued by non-banking finance companies were at 7.70-7.75% against 7.80-7.85% on Friday, they said.

Like Friday, banks did not raise any funds through certificates of deposit on Monday. Even though the liquidity deficit in the system has widened, banks did not raise funds due to elevated rates, dealers said. On Sunday, the net liquidity injected by the Reserve Bank of India--a proxy for systemic liquidity conditions--was at INR 2.21 trillion against INR 2.24 trillion on Saturday. Net liquidity injected by the central bank on Friday was at INR 2.25 trillion, as per RBI data. 

"There were banks which wanted to raise funds, but the deals could not be executed due to high rates demanded by mutual funds," a dealer at another brokerage fund said. Rates on three-month CDs issued by banks were quoted at 7.50-7.55%, the same as Friday's level, according to dealers.

--Primary market

* Godrej Industries, HDFC Securities, Pilani Investments, IGH Holding, Godrej Consumer Products, SBI Capital Securities and Julius Baer Capital raised funds through CPs.

* No funds were raised through CDs.

--Secondary market

* Punjab National Bank's CD maturing on Jan. 31 was traded six times at a weighted average yield of 7.3506.
* Aditya Birla Finance's CP maturing on Mar. 4 was traded once at a weighted average yield of 7.5503%.

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

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

Edited by Saji George Titus

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