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Informist, Thursday, Apr. 24, 2025

By Siddhi Chauhan

MUMBAI – Issuances in the certificates of deposit market were muted Thursday as most issuers remained on the sidelines, dealers said. Meanwhile, borrowing through commercial paper picked up Thursday on the back of some big-ticket issuances, they added. 

On Thursday, Bank of Baroda and Punjab National Bank were the only issuers in the CD market and raised INR 17 billion collectively, slightly down from the INR 20 billion raised on Wednesday. Bank of Baroda raised INR 10 billion through a three-month paper at 6.45%, while Punjab National Bank raised INR 7 billion through a three-month paper at 6.45%.  

"Rates are genuine right now, those who have needs will come to the market, but there is a general view that rates will fall from here," a dealer at a state-owned bank said. "So mostly these expectations are keeping issuers away."

Bank of Baroda and Punjab National Bank raised money to roll over their earlier issuances that will mature Friday. According to data compiled by Informist, CDs worth INR 10 billion issued by Punjab National Bank are set to mature Friday, while CDs worth INR 17.50 billion issued by Bank of Baroda will mature Friday.

Issuances in the commercial paper market were marginally higher than Wednesday at INR 38.75 billion on the back of big-ticket issuances, dealers said. Of the total raised through CPs Thursday, INR 30 billion was raised by Reliance Industries, L&T Finance and Aditya Birla Capital. 

"Most of the companies raised funds today (Thursday) because of rollover requirements. This has been the case this week," a dealer at a brokerage firm said. "Only those issuers who are in urgent need to raise funds are coming into the market right now." 

Reliance Industries raised INR 10 billion through a two-month paper at 6.42%, while L&T Finance raised INR 10 billion through a three-month paper at 6.77%. Aditya Birla Capital raised INR 10 billion through a three-month paper at 6.80%. Axis Securities, Birla Group Holdings and Motilal Oswal Financial Services were the other issuers who raised funds through CPs Thursday. 

Borrowing costs are likely to cool off in the coming weeks on the expectation of a rate cut by the Reserve Bank of India's Monetary Policy Committee meeting in June. This is not reflected fully in short-term debt market rates. The market is expected to factor in these expectations by the end of May, dealers said.

Rates on three-month CD issued by banks were flat at 6.45-6.65% Thursday. The indicative rates on the three-month commercial paper issued by manufacturing companies were unchanged from Wednesday at 6.40-6.60%, while rates on similar-maturity papers issued by non-banking financial companies were flat at 6.75-95%.

--Primary market

* Reliance Industries, Axis Securities, L&T Finance, Aditya Birla Capital, Birla Group Holdings and Motilal Oswal Financial Services raised funds through CPs.

* Bank of Baroda and Punjab National Bank raised funds through CD.

--Secondary market

* Punjab National Bank's CD maturing Friday was traded thrice at a weighted average yield of 5.8151%.

* ICICI Securities' CP maturing Friday was traded twice at a weighted average yield of 5.8896%.

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 Saji George Titus

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