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Informist, Thursday, Jan. 23, 2025

By Sachi Pandey

MUMBAI - Funds raised through short-term debt papers remained low on Thursday as borrowers continued to be on the sidelines waiting for costs to ease, dealers said.

Only three companies--LIC Housing Finance, BOBCARD, and HDFC Securities--raised funds through commercial papers Thursday.  Banks weren't present in the market. LIC Housing Finance was the largest issuer of CPs, raising INR 14.00 billion through papers maturing in one year at 7.74%.

Issuances of short-term debt instruments have remained low this week as issuers don't want to borrow at elevated rates. "There are no offers in the market. The rates are elevated because of the tight liquidity and will remain so until liquidity gets better," a fund manager at a large mutual fund house said. "Maybe by first week of February we can see better rates," the fund manager added.

Rates were broadly unchanged, with coupons on three-month CPs issued by non-banking financial companies ranging between 7.90-7.95% and those on three-month papers issued by manufacturing companies quoting at 7.55-7.60%. Rates on three-month certificates of deposit were at 7.50-7.55%, unchanged from Wednesday.

The net liquidity injected by the Reserve Bank of India--a proxy for systemic liquidity conditions--rose further to INR 2.88 trillion on Wednesday, its highest since Jan. 24, 2024. The already-tight liquidity conditions were further exacerbated this week due to payments for Goods and Services Tax, dealers said.

--Primary market

* BOBCARD, LIC Housing Finance, and HDFC Securities raised funds through CPs.

* There were no CD issuances.

--Secondary market

* Canara Bank's CD maturing on Feb. 3 was traded four times at a weighted average yield of 7.3354%.
* Tata Motors Finance's CP maturing on Friday was traded twice at a weighted average yield of 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 Ashish Shirke

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