More Stories

Informist, Wednesday, Mar. 26, 2025

By Vidhushi RajPurohit

MUMBAI – Primary issuances in the short-term debt market fell sharply as expectation of rates climbing down next month kept issuers on the sidelines, dealers said. Only one certificate of deposit was issued during the day and issuance of commercial papers was completely muted. Near month-end, most issuers had already met their refinancing needs for March, which further reduced the need for them to tap the debt market, dealers said. 

Canara Bank was the sole issuer for the day. The state-owned lender raised INR 15 billion through a one-year CD at 7.30%. The rates for one-year CD have already inched down to 7.30-7.35%, from 7.40-7.45% the previous day. Traders expect the rates to move down to around 7.15-7.20% in April on a rate-cut view. Heading closer to the next policy review meeting in April, market participants are widely expecting another 25-basis-point reduction in the repo rate, buoyed by the softer-than-expected CPI inflation print for February. 

"The rates in the longer-end are cooling faster as investors want to lock in the rates before there is a policy rate cut," a dealer at a private bank said. "Liquidity has also improved, and soon the shorter tenure will also see a cooling of rates, so everyone is waiting for that."

The net liquidity injected by the central bank--a proxy for liquidity conditions--declined to INR 1.57 trillion on Tuesday from Monday's INR 1.93 trillion, RBI data showed. Market participants expect the liquidity conditions to move to near-neutral by March-end owing to inflows from the government's month-end expenditure. Improvement in liquidity conditions further reduced the need for issuers to tap the short-term debt market, dealers said. 

--Primary market

* Canara Bank raised funds via CD.

--Secondary market

* Bank of Baroda's CD maturing on Mar. 14 was traded 13 times at a weighted average yield of 7.4801%.

* National Bank for Agriculture and Rural Development's CP maturing on Wednesday was traded once at a weighted average yield of 8.0005%

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 Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.