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Informist, Tuesday, Jun. 24, 2025

By Siddhi Chauhan

MUMBAI – Borrowing through certificates of deposit rose sharply Tuesday as banks tapped the market for their quarter-end needs, dealers said. CD issuances usually pick up towards the end of a quarter as banks seek to bump up their credit growth, dealers said. On Tuesday, INR 124.00 billion was raised through CDs, up from INR 24 billion Monday.

Union Bank of India was the largest CD issuer. The state-owned bank raised INR 61 billion through one-year and two-month papers at 6.35% and 5.85%, respectively. Canara Bank raised INR 28 billion through a paper maturing in October at 6.05%. On Monday, Indian Overseas Bank was the largest CD issuer. It raised INR 11 billion through a three-month paper at 5.95%.

"CD issuances rose today (Tuesday) as many banks need funds because of quarter end requirements," a dealer at a state-owned bank said. "Redemption pressure and credit offtake is usually high in June, so in order to align that, banks have to come to the market." According to data compiled by Informist, CDs worth INR 1.31 trillion were scheduled to mature in June, of which INR 151.75 billion are set to mature in the remaining days of the month.

Issuances of commercial papers saw only a marginal rise from Monday due to low requirement for funds, dealers said. On Tuesday, INR 20.50 billion were raised through CPs, up from INR 14.50 billion raised Monday.

"Other than a few issuers, most of them have already met their fund requirements," a dealer at a brokerage firm said. "Only those issuers are coming to the market who want to raise funds due to rollover."

Aditya Birla Capital was the largest CP issuer Tuesday. The company raised INR 10 billion through a three-month paper at 6.25%, followed by Kotak Securities which raised INR 3 billion through a three-month paper at 6.27%. On Monday, Bajaj Finance was the largest CP issuer, raising INR 9 billion through a three-month paper at 6.18%.

On Tuesday, indicative rates on three-month CDs issued by banks were unchanged from Monday's level of 5.86-6.06%. Rates on three-month CPs issued by non-banking financial companies were around Monday'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

* Aditya Birla Capital, National Bank for Agriculture and Rural Development, Kotak Securities, ICICI Securities, Axis Securities, Godrej Industries, and Redington raised funds through CPs.

* Union Bank of India, Canara Bank, Axis Bank, and HDFC Bank raised funds through CDs.

--Secondary market

* Bank of India's CD maturing Wednesday was traded once at a weighted average yield of 5.2202%.

* Hindustan Petroleum Corp.'s CP maturing Wednesday was traded 15 times at a weighted average yield of 5.2917%.

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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