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Informist, Friday, Feb. 21, 2025

By Siddhi Chauhan

MUMBAI-  Issuances through certificates of deposits remained firm as banks tapped the short-term debt market aggressively amid high redemptions this week, dealers said. Fundraising through CDs rose to INR 104 billion on Friday from INR 64 billion on Thursday, while funds raised through CPs fell to INR 83.75 billion from INR 117.25 billion on Thursday.

"A Large amount of papers were set to mature this week and it was only since yesterday (Thursday) that CD issuances have picked up," a dealer at a state-owned bank said. From Monday to Thursday, banks had raised only 119.50 billion through CDs. As per data compiled by Informist, certificates of deposits worth INR 271.80 billion and commercial paper worth INR 400.85 billion were set to mature in the week ended Friday. 

On Friday, Small Industries Development Bank of India was the largest CD issuer raising INR 40 billion through a one-year paper at 7.62%. HDFC Bank raised INR 30 billion through a one-year paper at 7.61% and Punjab National Bank mopped up INR 28 billion through a three-month paper at 7.45%.

On Thursday, Union Bank was the largest CD issuer raising INR 40 billion through three-month and one-year papers at 7.46% and 7.60% respectively. Volumes in the secondary market were also high as many investors sold near-term maturity papers to buy papers from the primary market, dealers said. 

Fundraising in the CP segment fell on Friday as most issuers met their rollover demand at the start of the week, unlike the CD segment, dealers said. "Borrowing through CPs have been pretty active since the start of the week, almost every day, over INR 50 billion were raised due to high maturity this week," a dealer at a brokerage firm said. "As a result, only those who were really in need of funds borrowed today (Friday)."

On Friday, Export-Import Bank of India was the largest CP issuer raising INR 25 billion alone through a three-month paper at 7.46% and Bajaj Finance raised INR 20 billion a through similar maturity paper at 7.77%. On Thursday, National Bank for Agriculture and Rural Development was the largest issuer raising INR 54 billion through a three-month paper at 7.50%.

On Friday, the rates on three-month CDs were unchanged at 7.45-7.65%. Rates on three-month CPs issued by manufacturing companies were around 7.51-7.71%. Rates on three-month CPs issued by non-banking financial companies were quoted at 7.77-7.98%.

--Primary market

* HDB Finance, L&T Finance, Export-Import Bank of India, Grasim, Securities, Canfin Homes, Bajaj Finance Ltd, Kotak Securities, Motilal Oswal Fiance, Tata Motor Finance and Axis Finance raised funds through CPs.

* PNB, HDFC Bank, SIDBI, IndusInd, IDBI Bank and Union Bank of India raised funds through CDs.

--Secondary market

* Bank of Baroda's CD maturing on Mar 3 was traded seven times at a weighted average yield of 6.8493%.

* Reliance Retail Ventures' CP maturing on Mar 3 was traded seven times at a weighted average yield of 6.9050%.

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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