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Informist, Friday, Aug. 22, 2025

By Vidhushi RajPurohit

MUMBAI – Rates in the short-term debt market held steady on Friday amid low primary issuances and subdued activity in the secondary market, dealers said. Most market participants stayed on the sidelines, engaging only in need-based issuances to roll over their upcoming maturities, they added.

Rates on commercial papers issued by manufacturing companies were at 5.85–5.90%, unchanged from Thursday. Similarly, papers of the same maturity from non-banking financial companies also quoted the same rate as Thursday, which was 6.20-6.25%. The rates on three-month certificates of deposit remained unchanged at 5.80-5.85%.

No banks issued CDs on Friday, as they had already surpassed the rollover requirements for August, dealers said. So far, banks have raised INR 602.10 billion while the total sum for maturity stood at INR 193.30 billion. On Thursday, Bank of Baroda was the top CD issuer, raising INR 17.50 billion at 6.25% through a paper maturing in May. Traders expect issuances to remain largely subdued till September when the credit disbursal needs are expected to pick up, dealers said. 

"Banks are not coming to the market that frequently, you'll see only one or two bank are active and that also when they have some internal need to manage the asset-liability," a dealer at a private sector bank said. "This time the redemption amount was not high and that was refilled by banks within the first few weeks and plus liquidity is also high." So far, in August, the liquidity surplus in the banking system, as indicated by the central bank's net absorption of funds, has averaged to INR 3.09 trillion. 

CP issuances also remained low with total quantum aggregating to INR 36.30 billion on Friday, slightly higher than INR 27.50 billion raised on Thursday. Aditya Birla Capital was the largest issuer for the day, borrowing INR 14.30 billion through a three-month paper at 6.29%. The other major issuers were Aditya Birla Housing Finance and Bajaj Housing Finance as each raised INR 5 billion. Aditya Birla Housing Finance raised the fund through a three-month paper at 5.89% and Bajaj Housing Finance issued a 10-month paper at 6.36%. 

On Friday, total turnover in the secondary market remained largely at the same levels as Thursday as traders refrained from placing aggressive trades ahead of the weekend, dealers said. Most of the activity in the secondary debt market was concentrated in papers maturing in three months, they said. CD trades amounting to INR 49.80 billion was recorded in the secondary market, against INR 46.50 billion Thursday. For CPs, the amount was at INR 46.40 billion, down from INR 65.90 billion Thursday. 

--Primary market

* Bajaj Housing Finance, L&T Finance, Aditya Birla Capital, Godrej Housing Finance, Axis Finance, Kotak Securities, SBI Capital Securities, Julius Baer Capital, Tata Capital and Aditya Birla Housing Finance raised funds through CPs

* No banks raised funds through CD

--Secondary market

* Bank of Baroda's CD maturing Monday was traded thrice at a weighted average yield of 5.5018%

* Tata Steel's CP maturing Monday was traded twice 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 Subhojit Sarkar

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