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Informist, Friday, Sept. 5, 2025

By Shravani Chandiwade

MUMBAI – Primary issuances in the short-term debt market were muted Friday as most bank branches were closed on the occasion of Id-e-Milad. However, banks in Mumbai city and its suburban regions were open as the Maharashtra government shifted the holiday for Id to Monday. Following this, the Reserve Bank of India Thursday announced that money markets would be operational on Friday, which was earlier a holiday.

"Most of the investors went on leave considering the long weekend before the holiday was shifted to Monday," a dealer at a state-owned bank said. "Hence the low participation from issuers was expected."

AU small finance bank was the sole issuer Friday. The bank raised INR 3.00 billion through a paper maturing in June at 6.84%. The bank likely issued the paper to roll over its upcoming maturities for the month which aggregates to INR 3.00 billion. Due to the muted participation of banks, the indicative rates on certificates of deposit remained unchanged from Thursday, dealers said. Rates on three-month CDs were at 5.80-5.85% Friday and those on six-month CDs at 6.05–6.16%. Rates for one-year papers were at 6.30–6.35%. 

"Thursday also, there were not many issuances of CDs in the primary market considering the holiday. So, it was evident that most of the banks will not tap the market until next week," a dealer at a private sector bank said.

Manufacturing and non-banking financial companies stayed away from the short-term debt market Friday, dealers said. There was no fundraising through commercial papers and borrowing rates also remained steady. Activity in the secondary market was also dull. CPs were not traded actively in the secondary market as mutual funds were not that active, dealers said. 

"Mutual funds have already lent what they could yesterday and locked up their funds for four days ahead of the long weekend. Hence, the short-term debt market is dull today," a dealer at a private sector bank said.

Rates on commercial papers for three-months issued by manufacturing companies were 5.90-5.95%, unchanged from Thursday. Similarly, papers of the same maturity from non-banking financial companies were also quoted at the same rates as Thursday – 6.55–6.60%.

--Primary market
* AU Small Finance Bank raised funds through CD

* No companies raised funds through CPs

--Secondary market

* HDFC Bank's CD maturing Oct. 10 was traded once at a weighted average yield of 5.7704%

* Axis Securities CP maturing Sept. 18 was once at a weighted average yield of 6.3488%

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

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

Edited by Avishek Dutta

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