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Informist, Tuesday, Jul. 15, 2025

By Vaishali Tyagi 

MUMBAI – Borrowing through the short-term debt market fell sharply Tuesday as most issuers had fulfilled their requirements the previous day, dealers said. Fundraising through commercial papers fell sharply to just INR 11.00 billion Tuesday from INR 133.5 billion the previous day. 

"Short-term debt market witnessed a decline in supply today (Tuesday), primarily due to issuers meeting their requirements," a dealer at a state-owned bank said. "Yesterday (Monday), most of the issuers had fulfilled their requirements, so the supply had reduced." The lower activity led to short-term borrowing rates remaining unchanged, dealers said.

National Bank for Agriculture and Rural Development was the largest issuer of commercial papers Tuesday, raising INR 9.5 billion through an eight-month paper at 6.05%, followed by Godrej Properties Ltd., which raised INR 1.5 billion through a three-month paper at 6.01%. On Monday, Small Industries Development Bank of India raised INR 35 billion through an eight-month paper at 6.06%.

Due to low demand for funds, the indicative rates for three-month CP issued by manufacturing companies were similar to Monday's levels at 5.80-6.00%. Rates on the three-month paper issued by non-banking financial companies were also unchanged at 6.15-6.35% Tuesday. 

There was a lull in CD issuances as well, with just one issuer tapping the short-term debt market. Funds raised through certificates of deposit fell to INR 2.5 billion from INR 11 billion raised on Monday. 

Karur Vysya Bank raised INR 2.5 billion through paper maturing in three months at 5.96%. Banks remained on the sidelines due to abundant liquidity conditions, dealers said. The RBI Monday net absorbed INR 2.61 trillion of liquidity from the banking system, lower than INR 2.94 trillion on Sunday. Banks Monday increased their cash balance with the central bank to INR 10.04 trillion, up from INR 9.74 trillion on Sunday, RBI data showed.

"CD issuances are very low as rollover demand is pretty low this week because of very few maturities," a dealer at a private bank said. Ample liquidity in the market has further reduced the pressing need for issuances, contributing to the muted activity. For CD, the rates for three-month papers were unchanged from Monday's level at 5.77-5.97%.

--Primary market

* National Bank for Agriculture and Rural Development and Godrej Properties raised funds through CPs.

* Karur Vysya Bank raised funds through CDs.

--Secondary market

* Axis Bank's CD maturing Wednesday was traded once at a weighted average yield of 5.3663%.

* ICICI Home Finance's CP maturing Wednesday was traded two times at a weighted average yield of 5.3732%.

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 Saji George Titus

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