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Informist, Tuesday, Feb. 25, 2025

By Kabir Sharma

MUMBAI – Issuances of certificates of deposit fell Tuesday as banks awaited a cool down in borrowing costs after having mostly met their month-end redemption requirements on Monday, dealers said. "CD issuances were low because banks wanted to raise funds below 7.40% (for three-month papers) but the investors weren't ready for such a lower rate," a dealer at a brokerage firm said. "Investors wanted rates above 7.45% levels."

National Bank for Agriculture and Rural Development was the sole issuer of certificates of deposit on Tuesday, raising INR 20.00 billion via a one-year paper at 7.60%. Rates on three-month CDs were largely unchanged from Monday's 7.45-7.65%. A total of INR 140.00 billion was raised on Monday through CDs. But while primary market activity was subdued, volumes in the secondary market rose to INR 158.40 billion from INR 116.10 billion Monday.

In the commercial paper segment, just INR 7.50 billion was raised on Tuesday, sharply down from INR 52.25 billion on Monday. "Issuances are quite low today because it is month-end closing. At this time we will see liquidity issues due to redemption pressures," a dealer at another brokerage firm said. "Issuers are also not raising funds right now because they know that funds will be available at a comparatively cheaper rate at the starting of March."

Network18 Media and Investments Ltd. raised INR 3.00 billion via a three-month paper at 7.52%. The media company also raised INR 1.00 billion at 7.50% for three months, but the value date of this paper will be set in March. Tata Projects Ltd. raised INR 2.00 billion at 7.63% via a three-month paper, while GIC Housing Finance raised INR 1.50 billion also via a three-month CP. 

--Primary market

* Network 18 Media and Investments, Tata Projects, and GIC Housing Finance raised funds through CPs.

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

--Secondary market

* Punjab National Bank's CD maturing on Mar. 13 was traded twice at a weighted average yield of 6.8952%.

* Small Industries Development Bank of India's CP maturing on Mar. 6 was traded twice at a weighted average yield of 6.9550%.

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 Deepshikha Bhardwaj

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