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Informist, Friday, Jun. 20, 2025

By Siddhi Chauhan

MUMBAI – Borrowing through the short-term debt market fell sharply Friday as most issuers had borrowed funds in advance ahead of their upcoming maturity, dealers said. Fundraising through commercial papers fell to just INR 16.00 billion Friday from INR 27.50 billion raised Thursday. Funds raised through certificates of deposits also fell to INR 19 billion from INR 40 billion raised on Thursday. 

Bajaj Finance was the largest issuer of commercial papers, raising INR 9 billion through a three-month paper at 6.18%, followed by Tata Capital Ltd. which raised INR 5 billion through a one-year paper at 6.74%. On Thursday, Kotak Securities was the largest CP issuer which raised INR 4.5 billion through a three-month paper at 6.30%, followed by ICICI Securities raising INR 4 billion through a three-month paper at 6.27%. 

"Fundraising was pretty high this week because of rollovers. Generally, rollover demand is high ahead of quarter end," a dealer at a brokerage fund said. "Those who want to rollover their upcoming maturities came to the market today (Friday)." In this week, CPs worth INR 423.48 billion were set to mature, according to data compiled by Informist.

In the CD segment, Canara Bank was the sole issuer which raised INR 19 billion through a three-month paper at 5.86%. The state-owned bank raised funds in order to align their rollover requirements, dealers said. On Thursday, HDFC Bank was the largest CD issuer, raising INR 25 billion through a three-month paper at 5.90%. 

The demand for CDs weakened Friday as banks had issued a whopping amount of INR 376 billion this week, higher than the maturity of INR 330.25 billion, data compiled by Informist showed. "CD issuances were quite high this week because of high credit off take and maturities," a dealer at a state-owned bank said. "The demand usually increased towards the end of quarter, which is what we have seen." The secondary market saw traction in papers maturing in six months to one year as mutual funds sold the short-term papers in order to lock in better yields, dealers said.  

On Friday, rates on three-month papers issued by non-banking financial companies were around Thursday's level of 6.30-6.50% while rates on three-month papers issued by manufacturing companies were at 5.96-6.12%.

--Primary market

* Bajaj Finance Ltd., Tata Capital Ltd. and SBI Capital Securities Ltd. raised funds through CPs.

* Canara Bank raised funds through CDs.

--Secondary market

* Bank of Baroda's CD maturing Monday was traded thrice at a weighted average yield of 5.2704%.

* Reliance Retail Ventures Ltd.'s CP maturing Monday was traded nine times at a weighted average yield of 5.2948%.

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 Deepshikha Bhardwaj

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