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Informist, Friday, Aug. 8, 2025

By Vidhushi RajPurohit

MUMBAI – Borrowing rates in the primary market remained unchanged Friday on account of tepid issuances and ample funds with mutual funds, which are the major investors in the market, dealers said. Issuances in the short-term debt market slumped Friday as market participants refrained from borrowing funds aggressively ahead of the weekend, dealers said.

"There are no indicators or events in the market to move the rates now," a dealer at a state-owned bank said. "It looks like rates will remain around the same levels unless we see some pick in issuances."

The indicative rates for three-month CPs issued by manufacturing companies were steady at 5.80-5.85%. For non-banking financial institutions, the rates for three-month papers were at 6.25-6.28%, the same as Thursday. The indicative rates for the three-month CDs were also unchanged from Thursday at 5.75-5.80%.

Only two companies tapped the short-term debt market to borrow INR 6.75 billion Friday through commercial papers, sharply down from 38.50 billion raised Thursday. ICICI Securities Primary Dealership was the major issuer as it mopped up INR 6 billion through a six-month paper at 6.55%. The balance 750 million was raised by Godrej Securities through a three-month paper at 5.98%. 

On the certificates of deposit front, Axis Bank was the sole issuer as it raised INR 20 billion through one-year paper at 6.35%. Other banks remained on sidelines as dealers cited mutued funding needs with surplus systemic liquidity above INR 3.50 trillion. On Thursday, Bank of Baroda was the only issuer and it issued a six-month CP to raise INR 20 billion. 

"The rates are not moving much and some banks are going for 6-month or 1-year tenure becuase at good rates they can lock in funds for a good duration," a dealer at a private sector bank said. "May be by mid-August we will see more banks on the issuing side as they will have to refill their maturing papers." So far, the total CD due for maturity this month amounts to INR 193.30 billion, lower than INR 230.95 billion which was in July. 

In the secondary market, rates for three-month insturments were up by 2-3 basis points on account of a rise in money market rates Friday, dealers said. The weighted average rate in the triparty repo market was at 5.47%, up from 5.39% Thursday. Rates in the money market rose Friday as the RBI held two variable rate reverse repo auctions of varied tenures for a cumulative notified amount of INR 3 trillion. Banks parked INR 1.46 trillion at the six-day auction and INR 130.45 billion at the three-day auction.  

--Primary market

* ICICI Securities Primary Dealership and Godrej Securities raised funds through CPs

* Axis Bank raised funds through CD

--Secondary market

* Bank of Baroda's CD maturing Tuesday was traded four times at a weighted average yield of 5.6976%

* Panatone Finvest's CP maturing Monday was traded three times at a weighted average yield of 5.5505%

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 Akul Nishant Akhoury

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