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Informist, Friday, Feb. 28, 2025

By Kabir Sharma

MUMBAI – Banks did not issue any certificates of deposit for the second consecutive day because of high rates, dealers said. "Rates will cool off in the next week as liquidity will get better, so people are waiting for that," a dealer at a brokerage firm said.

Dealers said liquidity is expected to improve going forward on account of government's month-end spending and as the Reserve Bank of India's dollar rupee swap conducted on Friday is scheduled to add liquidity to the system. On Thursday, the net liquidity injected by the RBI--a proxy for the systemic liquidity deficit--was INR 1.81 trillion, against INR 1.96 trillion on Wednesday, as per RBI data.

The commercial paper market saw some issuances as companies raised funds despite rates being on the higher side. Companies raised a total of INR 30.75 billion compared with INR 2.75 billion on Thursday. The National Bank for Agriculture and Rural Development raised INR 11.25 billion through a three-month paper at 7.53%. Birla Group Holdings Ltd. raised INR 9.00 billion at 7.92% through a three-month paper.

HDB Finance raised INR 4.50 billion at 7.40% by issuing a three-month paper and Godrej Industries raised INR 3.00 billion at 7.65% through a paper of similar maturity. Pilani Investment raised INR 2.00 billion at 7.92% in the same tenure. Axis Securities was the only company to issue a six-month paper, raising INR 1.00 billion at 7.88%. Rates on three-month CPs of manufacturing companies were in the range of 7.45-7.65% and those of non-bank finance companies in the range of 7.75-7.95%.

--Primary market

* Pilani Investments, Axis Securities, Birla Group Holdings, Godrej Industries, NABARD, and HDB Finance raised funds through CPs.

--Secondary market

* HDFC Bank's CD maturing on Mar. 24 was traded twice at a weighted average yield of 6.9292%.

* Titan Co.'s CP maturing on Mar. 6 was traded once at a weighted average yield of 7.0527%.

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 Ashish Shirke

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