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Informist, Wednesday, Mar. 19, 2025

By Siddhi Chauhan

MUMBAI – Short-term debt issuances fell on Wednesday as most issuers had fulfilled their borrowing requirements earlier in the week, dealers said. Till Tuesday, banks had raised INR 190 billion through certificates of deposits, while companies had raised INR 88.25 billion through commercial papers. 

On Wednesday, INR 12 billion was raised through CPs, against INR 72 billion on Tuesday, while INR 45 billion was raised by banks, against INR 103 billion the previous day. Export-Import Bank of India was the largest CD issuer, raising INR 25 billion through one-year CD at 7.53%. IndusInd Bank raised INR 20 billion through three CDs with different maturities at 7.90%. The private bank paid a spread of 15 basis points over the prevailing market rates, days after it disclosed certain accounting discrepancies in its derivatives book. 

On Monday, IndusInd Bank had raised INR 110 billion through multiple maturities. Market participants said the private bank was possibly raising funds due to year-end fund requirements. On Tuesday, Punjab National Bank was the largest issuer, raising INR 65 billion through three-month and one-year CDs at 7.56% and 7.57%, respectively.

"Issuers have also raised enough funds since the starting of month, banks like HDFC and PNB have been issuing CDs almost every other day because of heavy maturity," a dealer at a brokerage firm said. "I think most of the rollover demand is over, that's why issuances are also subdued." 

The sentiment was similar in the CP segment, as issuers in dire need of funds chose to tap the short-term debt market, dealers said. ICICI Securities was the largest CP issuer, raising INR 6 billion through one-month and three-month papers at a rate of 7.88% and 7.90%. Apart from ICICI Securities, HDB Financial Securities raised INR 5 billion through a three-month paper at 7.62%.  

On Tuesday, Bajaj Financial Securities was the largest CP issuer, raising INR 11.50 billion through a three-month paper at 7.91%. LIC Housing Finance raised INR 10 billion through a one-year paper at 7.65%.

Rates on three-month CDs remained unchanged at 7.55-7.65% on Wednesday. Rates on three-month CPs of non-banking finance companies were also unchanged from the previous day at 7.82-8.03%. Rates on CPs issued by manufacturing companies were at 7.65-7.85%.

--Primary market

* Export-Import Bank of India and IndusInd Bank raised funds via CDs.

* ICICI Securities, Aditya Birla Housing Finance and HDB Financial Services raised funds via CPs.

--Secondary market

* HDFC Bank's CD maturing on Thursday was traded 15 times at a weighted average yield of 6.5418%.

* Bajaj Financial Securities's CP maturing Thursday was traded thrice at a weighted average yield of 6.6077%.

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

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