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Informist, Thursday, Sept. 11, 2025

 

By Shravani Chandiwade

 

MUMBAI - Commercial paper issuances surged on Thursday, with one manufacturing and one non-banking financial company tapping the market for large-sized borrowings, dealers said. Borrowing in the certificates of deposit market also surged Thursday, with just one bank tapping the market for a big-ticket borrowing. There were no CD issuances Wednesday.

 

The total volume raised through commercial papers Thursday was INR 69.00 billion, up from INR 57.00 billion Wednesday. Export Import Bank of India was the big issuer, which raised INR 25 billion through a three-month paper at 5.88%. The non-banking financial company has met its rollover needs as it has a single CP worth INR 24.50 billion maturing this month. The other big issuer was ICICI Securities, which raised INR 10.00 billion through a three-month paper at 6.72%.

 

The indicative rates for commercial paper issued by non-banking financial companies for a three-month tenure were 6.70–6.75% and rates for manufacturing companies issuing the same tenure paper stood at 5.95–5.98%, dealers said.

 

On the certificates of deposit front, issuances surged on big-ticket borrowing from a single bank. HDFC Bank borrowed INR 50.00 billion through a six-month paper at 6.18% and also raised INR 20.00 billion through a one-year CD at 6.47%. The bank has total CDs worth INR 85.95 billion maturing this month and so far it has raised INR 78.50 billion.

 

"Given the liquidity surplus in the banking system and lack of any exceptional outflows, most banks staying on the sidelines in the CD market was expected," a dealer at a state-owned bank said. However, traders expect issuances to rise as the quarter-end period approaches.

 

Banks will step up CD issuances once they have clarity on their credit disbursal requirements and corresponding borrowing needs, dealers said. Periodic outflows on account of advance tax and Goods and Services Tax are expected to weigh on the liquidity surplus from next week, prompting an uptick in CD issuances, they said.

 

The indicative rates for CD rose Thursday as it is a quarter-end period, dealers said. Rates on three-month CD were 5.85-5.90%, up from 5.77-5.80% Wednesday. Rates on the six-month CD were 6.15–6.20% and those on one-year paper were 6.40–6.35%, they said.

 

"Another reason for high rates in the CD market is that mutual funds, as they are major investors in the CD market, are seen under redemption pressure right now," a dealer at another state-owned bank said. "This pressure is on account of banks as they are taking out their funds from mutual funds for other investments."

 

--Primary market
* HDFC Bank raised funds through CDs

* Godrej Industries, Tata Capital, Axis Securities, SBI Capital Securities, Pilani Investments, Julius Baer Capital, IGH Holdings, HDFC Securities, Kotak Securities, ICICI Securities, Small Industries Development Bank of India, Bharat Heavy Electricals, Export Import Bank of India raised funds through CP

 

--Secondary market

* Bank of Baroda's CD maturing Friday was traded three times at a weighted average yield of 5.3744%

* Tata Steel's CP maturing Friday was traded three times at a weighted average yield of 5.4466%

 

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
116.75	52.10	47.55	72.40

 

End

 

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

 

Edited by Ashish Shirke

 

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