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Informist, Thursday, Jul. 24, 2025

By Vidhushi RajPurohit

MUMBAI – Activity in the short-term debt market cooled off as most issuers have already met their fundraising needs earlier in the month, dealers said. Low roll over needs in July and slower credit-off take also contributed to lower activity in the primary market, they said. 

Issuances of commercial papers fell sharply to INR 5 billion, from INR 92.75 billion Wednesday. Only two companies tapped the short-term debt market, rasing INR 2.5 billion each. HDB Finance issued a CP maturing in eight days at 5.94% and Axis Finance raised the sum through a three-month paper at 6.22%. 

"Near month end, most companies have met their needs and now there is not much demand being seen after very heavy issuances in the last two days," a dealer at a mutual fund said.

This week, till Wednesday, total funds raised via CP aggregated to INR 189.5 billion, driven by some big-ticket issuances from non-banking financial entities such as Small Industries Development Bank of India and National Bank for Agriculture and Rural Development. Moreover, for July, total CP due for maturity stood at INR 1.01 trillion and so far companies have already exceeded the figure by raising INR 1.21 trillion. 

Only one bank tapped the certificates of deposit market Thursday. Indian Bank was the sole issuer, raising INR 10 billion via a one-year paper at 6.24%. Owing to low activity, the indicative rates on the three-month paper issued by banks remained unchanged from Wednesday's level at 5.75-5.80%.

In the secondary market mutual funds were seen selling papers of short-tenure and were buying duration papers, dealers said. Some mutual funds are facing the month-end redemption pressure and, therefore, are seeking to liquidate their holdings to meet their funding needs, they said. Banks, on the other hand, were seen buying short-term papers in low quantum. The overall trading quantum remained largely unchanged from the previous day. 

"Levels are slightly rising in the secondary market as some MFs (mutual funds) are facing their month-end redemption pressure, but the activity in the market is still not that high," a dealer at a mid-size brokerage firm said. 

--Primary market

* HDB Finance and Axis Finance raised funds through CPs.

* Indian Bank raised funds through CDs.

--Secondary market

* ICICI Bank's CD maturing Friday was traded twice at a weighted average yield of 5.5488%.

* Bajaj Housing Finance's CP maturing Friday was traded once at a weighted average yield of 5.5488%.

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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