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Informist, Monday, May 19, 2025

By Siddhi Chauhan

MUMBAI – Fundraising through the short-term debt market fell Monday as issuers tapped the market only to finance their rollover requirements, dealers said. "Issuers are only coming for rollover requirement. Many issuers have fulfilled their requirement earlier in the month," a dealer at a brokerage fund said. "Also not many CPs (commercial papers) are set to mature in the coming days."

On Monday, commercial papers worth INR 28.75 billion were issued, marginally down from INR 31.00 billion Friday. Funds raised through certificates of deposit also fell to just INR 30 billion Monday from INR 111 billion Friday. According to data compiled by Informist, CPs worth INR 210.29 billion were raised in the previous week, while funds raised through CD were INR 232.95 billion, of which INR 110.75 billion were raised on Friday alone. 

L&T Finance was the largest CP issuer and raised INR 7.5 billion through a three-month paper at 6.66% followed by Julius Baer Capital which raised INR 4.5 billion through a three-month paper at 6.88%. On Friday, ICICI Securities was the largest CP issuer, raising INR 10 billion through a three-month CP at 6.80%.

A similar sentiment was mirrored by the CD market as most banks remained on the sidelines despite upcoming maturities, dealers said. On Monday, Bank of Baroda was the largest issuer raising INR 20 billion through a three-month paper at 6.37%. Canara Bank bank also raised INR 10 billion through a three-month paper at 6.34%. On Friday, Small Industries Development Bank of India was the largest issuer, raising INR 50 billion through paper maturing in one year at 6.67%. 

"There are many buyers but the demand from issuers side is not there because everyone is waiting for rates to fall further," a dealer at a state-owned bank said. "The liquidity is also quite sufficient. Many banks had raised a fair sum on Friday so there doesn't seem to be any looming pressure as well." 

On Sunday, the RBI had net absorbed INR 2.12 trillion from the banking system, largely unchanged from Saturday and lower than INR 2.50 trillion Friday. Comfortable banking system liquidity and expectations of rate cut by the Reserve Bank of India's Monetary Policy Committee at its June meeting led to fall in short-term borrowing costs, dealers said. 

Rates in the short-term debt market remained unchanged Monday. Indicative rates on three-month CPs issued by non-banking finance companies were unchanged at 6.70–6.90% Monday. Rates on similar-tenor papers by manufacturing firms were steady at 6.55–6.75%, while those by banks were quoted at 6.34-6.55%.
 

--Primary market

* Godrej Industries, ONGC Petro Additions Ltd., L&T Finance, ICICI Securities, Kotak Securities, Axis Securities, Bajaj Finance Securities, Birla Group Holding, Pilani Investments and Julius Baer Capital raised funds through CPs.

* Canara Bank and Bank of Baroda raised funds through CDs.

--Secondary market

* Bank of Baroda's CD maturing Friday was traded once at a weighted average yield of 6.5016%.

* Reliance Retail Ventures Ltd's CP maturing Tuesday was traded 12 times at a weighted average yield of 5.7730%.

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 Vandana Hingorani

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