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Informist, Wednesday, Jul. 30, 2025

By Vidhushi RajPurohit

MUMBAI – Activity in the primary short-term debt market remained subdued as most issuers were on the sidelines after having met their rollover needs for July, dealers said. The appetite from the investors' side, too, was muted on account of month-end redemption pressure, they said. 

Banks have already exceeded their rollover needs by issuing certificates of deposit worth INR 433.45 billion so far in July against maturing papers worth INR 230.95 billion. Companies raised INR 1.48 trillion through CPs so far in July, higher than the total maturity of INR 1.01 trillion during the month.

India Bank and Bank of Baroda were the only issuers of certificates of deposit Wednesday. Indian Bank raised INR 15.00 billion through a three-month paper at 5.75%. Bank of Baroda raised INR 16 billion through a three-month CD at 5.75%. The indicative rates for three-month CDs remained unchanged from the previous day at 5.75-5.80% Wednesday. 

"The rates have not moved much and only banks with some internal funding needs are active now," a dealer at a state-owned bank said. "There could be some demand because near month-end, there are some funds needed to manage month-end credit disbursal needs."

Issuances of commercial paper inched lower to INR 6.5 billion from INR 8.00 billion raised Tuesday. Bajaj Housing Finance and Reliance Industries raised INR 2.5 billion each. While Bajaj Housing Finance raised the amount at 5.90% through a three-month paper, Reliance Industries issued a paper maturing in September at 5.73%. 

The indicative rates for three-month CP issued by manufacturing companies were at 5.80-5.85%, unchanged from the previous day. The rates for three-month papers issued by non-banking financial companies were also unchanged at 6.15-6.20%.

In the secondary market, mutual funds were seen selling papers maturing in three to six months as they faced a cash crunch on account of month-end redemption pressure, dealers said. Most of the trade was concentrated in three-month tenure, they said, while long-term papers were out of favour as traders cited a lack of clarity on the rate cut by the Reserve Bank of India's Monetary Policy Committee.

Most traders are of the view that the central bank's rate-setting panel will likely hold the policy rates unchanged at the policy review meeting next week. RBI Governor Sanjay Malhotra said last week that the RBI's rate-setting panel would look more at the outlook for the next six to 12 months than at current inflation and growth data to base its policy rate decisions.

--Primary market

* Reliance Industries, Bajaj Housing Finance and Godrej Properties raised funds through CPs.

* Bank of Baroda and Indian Bank raised funds through CDs.

--Secondary market

* Bank of India's CD maturing Monday was traded once at a weighted average yield of 5.7496%.

* Jubilant Ingrevia's CP maturing Thursday was traded once at a weighted average yield of 5.9140%.

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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