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Informist, Tuesday, Aug. 19, 2025

By Vidhushi RajPurohit

MUMBAI – Issuances of commercial papers more than doubled Tuesday driven by big-ticket issuances, as companies and non-banking financial companies flocked to the short-term debt market to roll over their maturing papers, dealers said. Borrowing rates in the market remained unchanged from the previous day on account of comfortable funds with mutual funds, which are the major investors in the market, they said. 

Total CP issuances surged to INR 60 billion Tuesday, from INR 26.50 billion raised Monday. National Bank for Agriculture and Rural Development was the top issuer for the day, raising INR 31 billion through a three-month CP at 5.80%. The non-banking financial lender has total maturity worth INR 50 billion for August, and excluding Tuesday's issuance, it had raised INR 15 billion this month.

The next big issuer was Reliance Retail Ventures and it issued a three-month CP to borrow INR 13 billion at 5.81%. The company has the largest share of maturing CP for August at INR 93 billion and against which, so far, it has issued papers worth INR 34.50 billion. 

"Gradually companies are coming to meet their rollover requirements," a dealer at a mid-size brokerage firm said. "Near month-end, the rates can rise due to redemption pressure on mutual funds so they will try to meet their borrowing target before that." So far, CP issuances have amounted to INR 621.38 billion and total amount of CP due for maturity is INR 1.19 trillion, according to data from Clearing Corp. of India collated by Informist.

Meanwhile, banks have already exceeded their rollover target for August which is leading to lacklustre issuances of certificates of deposit, dealers said. So far banks have issued CDs aggregating to INR 454.60 billion, higher than the maturity amount for August which is at INR 193.30 billion. On Tuesday, Canara Bank was the sole CD issuer and it raised INR 10 billion through a three-month paper at 5.76%. Ample surplus liquidity in the banking system has also led banks to remain away from the borrowing avenue, dealers said. In August, so far, the surplus liquidity in the banking system has averaged to INR 3.17 trillion.  

"The maturity requirement was not much, it will be higher next month because it will be quarter end period," a dealer at a state-owned bank said. "Those banks who have needs to meet their credit requirements are coming to the market right now."

The indicative rates for three-month CPs issued by manufacturing companies were unchanged at 5.85-5.95%. The indicative rates for three-month certificates of deposit were also at the same level as Monday's at 5.80-5.85%.

--Primary market

* Reliance Retail Ventures, National Bank for Agriculture and Rural Development, Blue Star, Aditya Birla Money, Axis Securities, Kotak Securities, HDFC Securities and ICICI Securities raised funds through CPs

* Canara Bank raised funds through CD

--Secondary market

* Indian Bank's CD maturing Wednesday was traded once at a weighted average yield of 5.3721%

* Kotak Securities' CP maturing Wednesday was traded once at a weighted average yield of 5.4028%

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 Subhojit Sarkar

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