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Informist, Monday, Jun. 23, 2025

By Siddhi Chauhan

MUMBAI – Commercial paper issuances were down Monday as issuers had met their borrowing requirements early in the month, dealers said. "Companies are coming (to the market) on a requirement basis. Many issuers had borrowed at the start of the month, fearing a rise in rates towards the end (of the month)," a dealer at a brokerage firm said. "Demand in the second half of a quarter is generally high, which causes rates to rise." On Monday just INR 14.50 billion were raised through CPs, down from INR 16.00 billion raised Friday.

Since Jun. 2, INR 1.56 trillion has been raised through CPs against the maturity of INR 1.67 trillion, according to data compiled by Informist. Bajaj Finance was the largest CP issuer on Monday, raising INR 9 billion through a three-month paper at 6.18%. Godrej Properties raised INR 4.50 billion through a three-month paper at 6.04%. On Friday, L&T Finance was the largest CP issuer. The company raised INR 12 billion through a three-month paper at 6.20%. Godrej Consumer had raised INR 5 billion through a three-month paper at 5.93% on Friday.

As demand for funds was low, short-term borrowing rates remained unchanged, dealers said. Rates on three-month papers issued by non-banking financial companies were around Friday's level of 6.30-6.50% while rates on three-month papers issued by manufacturing companies were at 5.96-6.12%.

The situation was similar in the case of certificates of deposit. Borrowing through these instruments rose marginally, dealers said. On Monday, borrowing through CDs was at INR 24 billion, up from INR 19 billion on Friday. As a result, rates on three-month papers issued by banks remained unchanged from Friday at 5.86-6.06%.

"There is not much demand from banks right now because most have already raised a huge sum ahead of their (CD) maturities," a dealer at a private sector bank said. "Credit offtake also is not much compared to March. It might pick up towards the end of the month, resulting in more issuance."

Demand was also low as goods and services tax outflows of over INR 1.5 trillion did not translate to a sharp fall in liquidity surplus. Even after these outflows, surplus remained above 1% of net demand and time liabilities of banks, dealers said. According to the latest data from the Reserve Bank of India, net liquidity absorbed by the central bank--a proxy for systemic liquidity surplus--on Sunday was INR 2.46 trillion, similar to Saturday but down from INR 2.94 trillion on Friday.

--Primary market

* Bajaj Finance, Fedbank Financial Services, and Godrej Properties raised funds through CPs.

* Union Bank of India, Punjab and Sind Bank, and Indian Overseas Bank raised funds through CDs.

--Secondary market

* The Jammu and Kashmir Bank's CD maturing Tuesday was traded once at a weighted average yield of 5.3663%.

* Reliance Industries' CP maturing Tuesday was traded nine times at a weighted average yield of 5.2995%.

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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