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Informist, Thursday, Sept. 4, 2025

 

By Shravani Chandiwade

 

MUMBAI – Volume in the primary market plunged Thursday as issuers remained on the sidelines in the early trading session ahead of the long weekend, dealers said. Moreover, later in the day, traders were uncertain regarding the rates in the short-term debt market, after the Maharashtra government shifted the holiday for Eid-e-Milad to Monday from Friday, for Mumbai and its suburban regions. 

 

The decision to shift the day of the holiday was taken to avoid a clash of the procession for Eid-e-Milad with the Hindu festival of Anant Chaturdashi, which is on Saturday, as per a notification by the Department of General Administration. During the trading session, traders awaited some clarity from the Reserve Bank of India regarding the holiday for money markets which was scheduled for Friday. 

 

Consequently, issuances of certificates of deposit declined sharply to INR 15.00 billion from INR 67.50 billion raised Wednesday. Bank of Baroda was the sole issuer, raising INR 15.00 billion at 6.30% through an eight-month paper. The bank has total CD worth INR 22.40 billion due for maturity this month. So far it has already raised INR 44.50 billion through CD.

 

"Liquidity is broadly high as of Wednesday, plus there is no clarity regarding the long weekend, so banks have not been that active on the issuing front," a dealer at a state-owned bank said. In the secondary market, mutual funds were selling short-term paper and using those funds to invest in long-term paper, dealers said. As per the central bank's latest data, liquidity surplus in the banking system stood at INR 2.97 trillion Wednesday.

 

On account of tepid issuances in the market, borrowing rates for CD remained unchanged from the previous close, dealers said. Rates on three-month CD were at 5.75-5.80% and those on six-month CD stayed at 6.05-6.16%. The rates for one-year paper were at 6.30-6.35%.

 

Total commercial paper issuances aggregated INR 24.50 billion Thursday, down from INR 39.75 billion raised Wednesday. ICICI Securities was the top CP issuer, raising INR 7.50 billion via three-month paper at 6.60%. The non-banking financial company has total CPs worth INR 100.30 billion due for maturity this month and so far it has raised INR 9.25 billion. The other major issuer was Axis securities, raising INR 5.75 billion through a three-month paper at 6.60%.

 

Indicative rates for three-month CPs issued by manufacturing companies were 5.90-5.95% unchanged from Wednesday. Those issued by non-banking finance companies were at 6.55–6.60%, sharply up from 6.35–6.39% Wednesday. Dealers said that the rise in the rate for non-banking financial companies was on account of subdued participation from lenders which awaited clarity regarding the money market holdiay for Friday, dealers said. Post market hours, the central bank said in a release that money markets will remain operational on Friday and the holiday will be shifted to Monday following the announcement from the government of Maharashtra.  

 

--Primary market

* Indian Oil Corp, Aditya Birla Housing, Godrej Industries, Axis Securities, HDFC Securities and ICICI Securities raised funds through CPs

* Bank of Baroda raised funds through CD

 

--Secondary market

* Indian Bank's CD maturing Monday was traded four times at a weighted average yield of 5.3426%

* Reliance Retail Ventures CP maturing Monday was traded four times at a weighted average yield of 5.3915%

 

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:

 

Certificates of deposit		Commercial paper
Thursday	Wednesday	Thursday	Wednesday
104.00	126.80	112.35	185.50

 

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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