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Informist, Tuesday, Jan. 14, 2025

By Siddhi Chauhan

MUMBAI – Monday's streak of heavy commercial paper issuances continued on Tuesday as issuers raised funds ahead of upcoming redemptions, dealers said. "CP issuances that we are seeing these days are mostly because they want to roll over papers ahead of their maturity," a dealer at a brokerage said.

Non-banking financial institutions and manufacturing companies raised a cumulative INR 40.25 billion on Tuesday, as against INR 25.75 billion on Monday. Bajaj Finance was the largest issuer, raising INR 15 billion for three months at a rate of 7.90%. It was followed by Bajaj Finance Securities, which raised INR 10 billion for three months at a rate of 7.77%. On Monday, SBI Capital Securities was the largest issuer of CPs, raising INR 8.00 billion through paper maturing in March at 7.85%.  

According to data compiled by Informist, CPs worth INR 879.29 billion are set to mature in January. Out of this, INR 203.46 billion is set to mature this week, of which Bajaj Finance's redemptions are estimated at INR 7.95 billion.  

The rates on three-month CPs issued by manufacturing companies remained flat at 7.55-7.60%, dealers said. Rates on similar-maturity CPs issued by non-banking finance companies rose to 7.85-7.90 against 7.80-7.85% on Tuesday, they said.

There were no issuances of certificates of deposit for the second consecutive day on Tuesday. "Many banks are comfortable with the amount of cash that they hold with them right now," a dealer at a brokerage fund said. "Even though the liquidity is in deficit, some inflows are coming into the system. The availability of enough cash and no major outflow in this is stopping them from issuing CD." The rates on the three-month CD were flat from Monday at 7.55-7.60%. 

On Monday, the net liquidity injected by the RBI--a proxy for systemic liquidity conditions--rose to INR 2.50 trillion from INR 2.21 trillion on Sunday, as per data from RBI.

--Primary market

* ICICI Securities, Tata Projects, HDFC Securities, Bajaj Financial Securities, Bajaj Finance, Godrej Industries and APL Apollo Tubes raised funds through CPs.

* No funds were raised through CDs.

--Secondary market

* Punjab National Bank's CD maturing on Mar. 27 was traded four times at a weighted average yield of 7.3002.
* Export and Import Bank of India's CP maturing on Mar. 4 was traded four times at a weighted average yield of 7.2633%.

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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