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Informist, Thursday, Jul. 31, 2025

By Vidhushi RajPurohit

MUMBAI – There were no issuances of certificates of deposits in the short-term debt market Thursday because of subdued investor appetite, dealers said. Month-end redemption pressure on mutual funds, which are major investors in the market, kept them away from the primary market.

"There is a cash crunch right now due to month-end, so no deals were there," a dealer at a mid-size brokerage firm said. "Around 4th of next month when they (mutual funds) get some inflows, then we will see more activity."

From the borrowers' side as well, demand was not that aggressive as most had met their rollover requirements for the month, dealers said. Moreover, for July, the total quantum of both CDs and commercial papers due for maturity was also lower compared with the previous month. In the case of commercial papers, INR 1.01 trillion was due for maturity, sharply down from INR 2.13 trillion of CPs that matured in June. The CDs due for maturity in July aggregated INR 230.95 billion, drastically lower than INR 1.31 trillion in the previous month.

On the CP front, only two companies tapped the market to raise a total of INR 5.50 billion, down from INR 6.50 billion raised on Wednesday. Network TV 18 raised INR 4 billion through a three-month CP at 5.88%. The balance INR 1.5 billion was raised by Bajaj Finance Securities through a CP maturing on Aug. 14 at 6.15%.

"There were some issuers who wanted to borrow, but since fund houses are not that active to lend, deals were not done," a dealer at another brokerage firm said. "Liquidity is also there so no one had urgent need for funds." On Wednesday, the net liquidity absorbed by the Reserve Bank of India--a proxy for the systemic liquidity surplus--was INR 2.54 trillion. 

On account of subdued activity, borrowing rates remained unchanged from the previous day. The indicative rates for three-month CP issued by manufacturing companies were at 5.80-5.85%, same as Wednesday. The rates for three-month papers issued by non-banking financial companies were also unchanged at 6.15-6.20%. The indicative rates for three-month CDs also remained unchanged from the previous day at 5.75-5.80% Thursday.

--Primary market

* Bajaj Finance Securities and Network TV 18 raised funds through CPs

* Banks did not raise funds through CDs

--Secondary market

* Bank of Baroda's CD maturing Monday was traded once at a weighted average yield of 5.7454%

* Dalmia Cement Bharat's CP maturing Friday was traded twice at a weighted average yield of 5.6949%

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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