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Informist, Monday, Apr. 28, 2025

By Siddhi Chauhan

MUMBAI – Fundraising through the commercial paper market rose Monday on the back of big-ticket issuances by National Thermal Power Corp. Ltd. and Reliance Jio Infocomm Ltd., dealers said. Borrowing through CPs Monday were at INR 69 billion, up from INR 13 billion Friday. Meanwhile, most banks refrained from tapping the short-term debt market due to lower credit offtake in the month, they added. 

National Thermal Power Corp. was the largest CP issuer and raised INR 30 billion through a three-month paper at 6.58%, while Reliance Jio Infocomm raised INR 16 billion through a three-month paper at 6.59%. National Thermal Power Corp. tapped the short-term debt market despite no maturity lined up this month.

According to data compiled by Informist, Reliance Jio raised more than the redemption requirement of INR 35.5 billion. So far in April, Reliance Jio has already raised INR 157.25 billion, as per data compiled by Informist. As per market players, the companies would have tapped the short-term debt market in order to finance some internal requirement.  

In an unusual occurence, HDB Financial Services raised INR 2 billion through a paper maturing in seven days at 6.60%. "They (HDB Financial Services) must have had some financing requirement for that duration. Probably they might be facing some disbursement pressure from banks so they would have raised a shorter-tenure paper," a dealer at a brokerage said. 

Meanwhile, no funds were raised by banks in the certificates of deposit segment as most banks had fulfilled their requirements, dealers said. However, even with low demand for funds some deals were not executed due to redemption pressure from mutual funds, dealers said. On Friday, Bank of Baroda was the sole issuer in the CD market, raising INR 5.00 billion through a three-month paper at 6.45%.

"A few banks were looking to add on to the same levels which were dealt on the previous day (Friday) but they couldn't raise funds at the same levels today (Monday)," a dealer at another brokerage fund said. "This happened because mutual funds don't have enough funds right now so they are demanding a higher level." 

Redemption pressure from mutual funds resulted in indicative rates on the three-month paper issued by banks to rise by 5 basis points to 6.50-6.70%. The indicative rates on three-month CPs issued by manufacturing companies rose 15 bps to 6.55-6.75%. Rates on similar-maturity paper issued by non-banking finance companies rose 5 bps to 6.80-7.00%.

--Primary market

* HDB Financial Securities, Aditya Birla Capital, National Thermal Power Corp. Ltd., Reliance Jio Infocmm Ltd., Canfin Homes Ltd., Godrej Industries, ICICI Securities and Oil and Natural Gas Corp. raised funds through CP.

* No funds were raised through CDs.

--Secondary market

* Axis Bank's CD maturing Friday was traded once at a weighted average yield of 6.4639%.

* Barclays Investments and Loans India Pvt. Ltd's CP maturing Tuesday was traded once at a weighted average yield of 5.9505%.

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

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