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Informist, Friday, Jul. 11, 2025

By Vidhushi RajPurohit

MUMBAI – The short-term debt market was largely muted as participants concentrated on the big-ticket issuance by REC Ltd., which tapped the market for the first time since November 2023, dealers said. The power finance company raised INR 30 billion through a commercial paper maturing in June at 6.25%. Most other issuers remained on the sidelines ahead of the weekend and less demand for funds, dealers said. 

Total fundraising through CP was at INR 47.00 billion, up from INR 12.10 billion Thursday. The rise in the quantum was largely driven by the issuance from REC. Bajaj Finance was the other big issuer raising INR 12 billion via a one-year paper at 6.56%. The non-banking financial company has INR 36.25 billion worth of maturities due for the remainder of July. 

"Everyone was focused on REC's issuances as the size was big and it is not an usual issuer, too," a dealer at a mid-size brokerage firm said. "Even in secondary there wasn't much interest from anyone." 

No banks tapped the certificates of deposit market Friday as dealers cited low funding needs amidst slower credit offtake at quarter-start. Moreover, the banking system liquidity surplus also remained above INR 3 trillion, which further lowered fundraising needs, they said. On Thursday, the RBI net absorbed INR 3.15 trillion from the banking system. The Reserve Bank of India also conducted an INR 2.5 trillion worth seven-day variable rate reverse repo auction. The auction was undersubscribed as total offers by banks amounted to INR 1.52 trillion, which the central bank accepted in full and set the cut-off rate at 5.49%. 

The reverse repo auction led the rates in the short-term debt market also to inch higher, dealers said. The indicative rates for three-month CP issued by manufacturing companies rose to 5.85-5.90%, from 5.80-5.85% Thursday. For CD, the rates for three-month papers were at 5.80-5.85%, up from 5.75-5.80% Thursday. 

--Primary market

* REC Ltd, Bajaj Finance Ltd. and Grasim Industries raised funds through CPs.

* No banks raised funds through CD.

--Secondary market

* Axis Bank's CD maturing Wednesday was traded once at a weighted average yield of 5.4584%.

* Tata Capital Ltd's CP maturing Monday was traded five times at a weighted average yield of 5.4107%.

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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