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Informist, Thursday, Jun. 19, 2025

By Siddhi Chauhan

MUMBAI – Issuances of certificates of deposit fell sharply Thursday, after over INR 200 billion was raised the previous day, dealers said. Demand-supply mismatch also affected the volume of issuances in the primary market, they said.

"The issuances could have been higher but both parties were unable to agree upon rates," a dealer at a state-owned bank said. "The sentiment is similar to yesterday (Wednesday). Demand is there because of high redemption this month and credit off." On Friday, commercial papers worth INR 126.95 billion and CD totalling INR 35.75 billion are due to mature, data from the Clearing Corp. of India compiled by Informist shows.

On Thursday, INR 40 billion was raised from CD issuances, sharply down from INR 202 billion raised Wednesday. HDFC Bank was the largest CD issuer, raising INR 25 billion through a three-month paper at 5.90%. Indian Bank raised INR 10 billion through a three-month paper at 5.86%. On Wednesday, Union Bank of India was the largest CD issuer. It raised a total of INR 70 billion through two papers of different maturities.

On the other hand, issuances through commercial papers were up Thursday at INR 27.50 billion, from INR 15.25 billion raised Wednesday. Issuers tapped the CP market due to rollover requirements, dealers said. L&T Finance was the largest CP issuer, raising INR 12 billion through a three-month paper at 6.20%, followed by Godrej Consumer which raised INR 5 billion through a three-month paper at 5.93%.

Kotak Securities was the largest CP issuer. It raised INR 4.5 billion through a three-month paper at 6.30%, followed by ICICI Securities, which raised INR 4 billion through a three-month paper at 6.27%.

On Thursday, rates on three-month papers issued by non-banking financial companies were around Wednesday's level of 6.30-6.50% while rates on three-month papers issued by manufacturing companies were at 5.96-6.12%. Going forward, market expects the short-term borrowing costs to rise by at least 5 basis points as surplus liquidity in the banking system is expected to fall Friday, dealers said. The first tranche of goods and services tax outflows is due on Friday. These outflows are expected to drain INR 1.5 trillion to INR 2.0 trillion from the banking system, dealers said.

--Primary market

* Godrej Consumer, L&T Finance, Bajaj Finance Securities, Birla Group Holdings, IGH Holdings, and Axis Securities raised funds through CPs.

* Bank of Baroda, HDFC Bank, Indian Bank raised funds through CDs.

--Secondary market

* Punjab National Bank's CD maturing Friday was traded thrice at a weighted average yield of 5.2572%.

* Reliance Jio Infocomm's CP maturing Friday was traded seven times at a weighted average yield of 5.2568%.

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 Ashish Shirke

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