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Informist, Thursday, May 29, 2025

By Sachi Pandey

MUMBAI – Fundraising through commercial paper surged Thursday, driven by large-ticket issuances by public-sector giants like Small Industries Development Bank of India, National Bank for Agriculture and Rural Development, and Indian Oil Corp., dealers said. These three issuers alone raised INR 126.00 billion of the total INR 158.50 billion raised through CP on the day.

NABARD led the pack with an issuance of INR 50.00 billion of three-month paper at 6.16%. Indian Oil followed closely behind, issuing CP worth INR 46.00 billion at the same maturity and rate. SIDBI raised INR 30.00 billon through a three-month paper at a slightly lower rate of 6.14%.

Market participants said NABARD and Indian Oil tapped the market ahead of their respective CP maturing in June. SIDBI, meanwhile, issued paper to take advantage of competitive rates.

Among non-banking finance companies, HDFC Securities stood out as the largest issuer of CP, raising INR 13.00 billion at 6.58% through a three-month paper. Wednesday, Aditya Birla Housing Finance had led fundraising with a three-month issue of INR 6.00 billion at 6.23%.

Issuances through certificates of deposit also picked up, with banks raising INR 20.00 billion Thursday. There was no CD issuance Wednesday. Canara Bank and Indian Bank each issued INR 10.00 billion-worth three-month CDs at 6.10% and 6.12%, respectively.

"In the secondary market, it is almost flat now, (but) interest is still there in 3-month and 1-year paper," a private-sector bank said. "In (the) primary market, rates have come down significantly, but issuances are not as expected due to low need for funds and banks have mostly rolled over their papers in (the) last few weeks when we saw heavy issuances, but issuers will raise as and when required."

Rates in the short-term debt market eased further, continuing the 10-basis point fall seen earlier this week. Three-month CP rates for non-banking finance companies dropped by 15 bps to 6.35–6.55%, while manufacturing firms saw rates decline to 6.17–6.47% from 6.45–6.65%. Three-month CD rates were down 2 bps at 6.10–6.30%. "Core liquidity is healthy, and RBI's dividend payout is supporting the market as expected. Rates should keep falling," a fund manager at a mid-sized mutual fund said.

Wednesday, the RBI net absorbed INR 1.91 trillion from the banking system, slightly higher than INR 1.89 trillion Tuesday, data from the central bank showed. Banks parked INR 2.29 trillion with the RBI at the Standing Deposit Facility rate Wednesday, compared with INR 2.27 trillion Tuesday.

--Primary market

* Small Industries Development Bank of India, National Bank for Agriculture and Rural Development, Indian Oil Corp., Tata Power Renewable, Axis Securities, Kotak Securities, HDFC Securities, Aditya Birla Money, Credila, and Cholamandalam Finance raised funds through CP.

* Canara Bank and Indian Bank raised funds through CDs.

--Secondary market

* IndusInd Bank's CD maturing Jun. 5 was traded twice at a weighted average yield of 6.4003%.

* Reliance Jio Infocomm Ltd.'s CP maturing Friday was traded seven times at a weighted average yield of 5.8352%.

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 Nishant Maher

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