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Informist, Friday, Apr. 11, 2025

By Siddhi Chauhan

MUMBAI – The activity in the short-term debt market was dull on Friday with sharply lower issuances in the commercial paper market and none in the certificates of deposit segment ahead of a long weekend, dealers said. Companies raised INR 27.25 billion through CPs on Friday, sharply down from INR 192.75 billion on Wednesday. 

"Today was a quite dull day, only those with rollover needs tapped the market," a dealer at a brokerage firm said. "Both L&T Finance and Tata Motor Finance have issued funds due to upcoming maturities in April." Money markets were shut Thursday for Mahavir Jayanti and will be shut on Monday for Ambedkar Jayanti.

Tata Motor Finance was the largest CP issuer Friday, raising INR 23.00 billion through a three-month paper at 6.90%. L&T Finance raised INR 4.00 billion through an 11-month paper at 7.07%. As per data compiled by Informist, the non-bank finance company's papers worth INR 36.00 billion are set to mature this month. On Wednesday, National Bank for Agricultural and Rural Development raised INR 95.00 billion through a three-month paper at 6.58% and Small Industries Development Bank of India mopped up INR 50.00 through a three-month paper at 6.58%.

The indicative rates on the three-month paper issued by non-banking financial companies were unchanged from Wednesday at 6.65-6.85%. The rates on three-month paper issued by manufacturing companies were also unchanged from Wednesday at 6.55-6.75%.  

"In the primary market, I think there was not even a single offer from banks today (Friday). Issuers don't want to raise funds heading towards a long weekend because of uncertainty," a dealer at another brokerage said. "There is always a fear that rates might change on the next working day, this stops issuers from raising funds during that time." This sentiment prompted banks to shift their focus to the secondary market, dealers said.

Improved liquidity conditions also dampened the demand for funds from banks, dealers said. The systemic liquidity has been in surplus since March-end. The latest data showed the central bank absorbed INR 1.86 trillion Thursday, up from INR 1.82 trillion Wednesday.
 

The lack of interest from banks also resulted in indicative rates on the three-month CDs to fall by 2 basis points to 6.50-6.70% on Friday. On Wednesday, Bank of Baroda was the sole issuer in the CD market, raising INR 10.00 billion through a six-month paper at 6.85%.

--Primary market

* Tata Motor Finance, Axis Securities and L&T Finance raised funds through CPs.

* No funds were raised through CDs. 

--Secondary market

* National Bank for Agricultural and Rural Development's CD maturing on Tuesday was traded once at a weighted average yield of 5.7524%.

* Reliance Jio Infocomm's CP maturing on Tuesday was traded thrice at a weighted average yield of 5.8653%.

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 Saji George Titus

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