More Stories

Informist, Thursday, Aug. 28, 2025

By Shravani Chandiwade

MUMBAI – Issuances in the short-term debt market remained tepid with companies and non-banking financial institutions tapping the market only to meet some rollover requirements, dealers said. Banks were mostly on the sidelines, having already met their rollover needs for August, they said. Moreover, ample surplus liquidity in the banking system and subdued appetite from mutual funds, which are major investors in the market, also kept issuances subdued.

Bank of India was the sole issuer of certificates of deposit. The state-owned lender raised INR 50.00 billion through a three-month paper at 5.82%. "Banks did not tap the market as rollover needs are already met for this month plus month-end inflows have also started to come in," a dealer at a state-owned bank said.

Month-end inflows commenced Tuesday in Maharashtra and Kerala to make up for the holidays in these states for Ganesh Chaturthi and Onam, respectively. Traders expect around INR 1.50 trillion to be injected into the banking system by next week after the total inflows from the government's salary and pension payouts. As per the latest data from the Reserve Bank of India, the surplus liquidity in the banking system, as indicated by the central bank's net absorption of funds, was at INR 1.83 trillion Wednesday.

The indicative rates in the CD market remained steady Thursday. Rates for three-month CD were at 5.77-5.80%, unchanged from Tuesday, dealers said. Rates for six-month CD remained at 6.05-6.16% and those for one-year paper were at 6.30-6.35%, they said.

Mutual funds were not very active in the primary debt market as they were facing a cash crunch on account of the month-end redemption pressure. However, this did not have a significant impact on rates as the participation of issuers was also muted. "Rates remained broadly unchanged," said a dealer at a state-owned bank. "However, if the rating is below AAA+, then investors were charging slightly higher."

In the secondary market, fund houses were seen selling short-term debt instruments on account of the redemption pressure. On the other hand, some banks were actively buying paper to deploy their surplus funds, dealers said.  

Issuances of commercial paper remained at the same level as Tuesday, with the total quantum raised being INR 19.00 billion Thursday, against INR 18.25 billion Tuesday. The major CP issuer was Aditya Birla Housing Finance, raising INR 7.50 billion through a three-month paper at 5.92%. The next big issuer was Aditya Birla Capital, which raised INR 5.00 billion through a three-month paper at 6.35%. Bajaj Financial Securities raised INR 4.00 billion through paper due for maturity on Sept. 22 at 6.20%. Most companies tapped the market to meet their need-based funding requirements with few fresh issuances, dealers said.

--Primary market

* Aditya Birla Housing Finance, Aditya Birla Capital, Bajaj Financial Securities, and Kotak Securities raised funds through CP. 

* Bank of India raised funds through CD.

--Secondary market

* Canara Bank's CD maturing Monday was traded twice at a weighted average yield of 5.5971%.

* Reliance Jio InfoComm's CP maturing Friday was traded five times at a weighted average yield of 5.4667%.

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 Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.