More Stories

Informist, Tuesday, Jan. 21, 2025

By Vidhushi RajPurohit

MUMBAI – Amid high borrowing rates and having borrowed funds earlier in the month, issuances of certificates of deposit by banks were muted on Tuesday. However, big borrowing by the National Bank for Agriculture and Rural Development picked up the total amount borrowed through CDs from the previous day. The non-banking financial lender mopped up INR 28.25 billion through a one-year paper at a coupon rate of 7.66%. The amount raised through CDs was sharply higher than INR 8.00 billion borrowed on Monday by Punjab and Sindh Bank.

Rates on three-month CDs were up by 5 bps at 7.50-7.55%. For one-year maturity, the rates were at 7.65-7.70%, also up 5 bps from the previous day. Rates on three-month CPs issued by non-banking finance companies eased slightly to 7.85-7.90%, from 7.90-7.95% Monday, while three-month CPs issued by manufacturing companies were unchanged at 7.55-7.60%. 

Dealers attributed the high rates to the persistent deficit liquidity in the banking system since mid-December. On Monday, the net liquidity injected by the RBI--a proxy for systemic liquidity conditions--rose to INR 2.36 trillion from INR 1.94 trillion on Sunday, as per data from the RBI. 

"The (liquidity) deficit is not easing, so that has kept the rates up and now the month-end is approaching, so rates are an issue when banks want to borrow funds," a dealer at a state-owned bank said. "Most issuers are waiting for the rates to cool down before tapping the CD market." So far in January, banks have issued CDs amounting to INR 55.85 billion, against the redemption figure of INR 89.32 billion. 

Issuance of commercial papers fell slightly. The total quantum of CPs raised on Tuesday amounted to INR 22.20 billion, against INR 29.75 billion on Monday. Bajaj Finance was the largest issuer of CPs, raising INR 4.75 billion through a one-year paper at 7.83%. 

--Primary market

* Tata Realty and Infrastructure Limited, Redington, UltraTech Cement, HDFC Securities, ONGC Petro additions, Godrej Industries, Kotak Securities and Bajaj Finance raised funds through CPs.

* National Bank for Agriculture and Rural Development raised funds through CDs.

--Secondary market

* National Bank for Agriculture and Rural Development's CD maturing on Tuesday was traded once at a weighted average yield of 7.7125%.
* L&T Metro Rail (Hyderabad)Ltd's CP maturing on Wednesday was traded once at 6.7172%.

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 Avishek Dutta

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.