More Stories

Informist, Monday, Jun. 2, 2025

By Sachi Pandey

MUMBAI – Fundraising through commercial papers inched up on Monday on account of a big-ticket issuance by Indian Oil Corp. Ltd. However, other major investors and banks remained absent from the short-term debt market. 

Companies raised a total of INR 32 billion through CPs, of which Indian Oil Corp. alone raised INR 25.50 billion through two papers of the same maturity, but different coupons. A prominent player in the oil industry, Indian Oil Corp. raised INR 18 billion through three-month paperS at 6.16% and INR 7.50 billion through papers of same tenor but at a slightly higher rate of 6.18%. On Thursday, Indian Oil Corp. raised INR 46 billion through papers maturing in three months at 6.16% rate. 

On Friday, CP issuances stood at only INR 10.50 billion with Bharat Heavy Electricals Ltd. being the largest issuer, raising INR 3 billion through three-month CPs at 6.55% coupon rate.

No certificates of deposits were issued on Monday, making it the second consecutive trading day where banks remained absent from the market. "This is start of the month, so banks need liquidity. They will come after MPC (Monetary Policy Committee) meeting now," a dealer at a large sized brokerage firm said.  

The liquidity in the banking system, however, remains strong with the Reserve Bank of India net absorbing INR 2.10 trillion from the banking system Friday, higher than the INR 1.80 trillion Thursday, central bank data showed. Banks parked INR 2.29 trillion with the RBI at the Standing Deposit Facility rate on Friday, higher than the INR 2.19 trillion on Thursday. 

The rates remained flat across short-term debt instruments after falling more than 25 basis points last week. Three-month CPs for non-banking financial companies were quoted at 6.35–6.55%, while those for manufacturing firms were at 6.17–6.47%. Three-month CD rates stood at 6.10–6.30%. 

"Rates are almost flat now, because not many big deal was struck today (Monday). And till the MPC meeting, the rates might not fall that much," a dealer at a state-owned bank said. "Now everyone is waiting for MPC decision. If there is a cut in repo rate, then the rates can fall to 6.00% (for 3-month CD). If no cut, then there will be a sharp retracement and the rates can go up to 6.40% again which we saw at the start of this (May) month."

According to 14 economists and treasury officials polled by Informist, the RBI's Monetary Policy Committee is widely expected to lower the policy repo rate by 25 bps for the third consecutive meeting on Friday. Thirteen of the 14 poll respondents said they see the committee reducing the repo rate to 5.75% from the current 6.00% at the end of the three-day MPC meeting. State Bank of India was the sole outlier in the poll, expecting a larger rate cut of 50 bps.

The rate cut would be to support growth amidst a challenging global environment while inflation remains below the target, an official polled by Informist said. 

--Primary market

* Small Industries Development Bank of India, Indian Oil Corp., Network18, GIC Housing Finance raised funds through CPS.

--Secondary market

* Bank of Baroda's CD maturing Thursday was traded three times at a weighted average yield of 6.1900%.

* Aditya Birla Housing Finance Ltd.'s CP maturing Tuesday was traded five times at a weighted average yield of 5.7835%.

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 Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.