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Informist, Friday, Sept. 12, 2025

 

By Shravani Chandiwade

 

MUMBAI – Issuances in the short-term debt market were sharply down on Friday as issuers had already met their funding needs earlier in the week, dealers said. The majority of the banks also did not tap the market due to ample liquidity surplus in the banking system and the elevated rates, they said.  

 

Borrowing via the certificates of deposit fell to INR 20.00 billion on Friday from INR 70.00 billion Thursday. Funds raised through commercial paper on Friday declined to INR 19.00 billion from INR 69.00 billion Thursday as companies refrained from tapping the market ahead of the weekend, dealers said.

 

ICICI Securities was the main issuer in the CP market, raising INR 10.00 billion via a three-month paper at 6.72%. Godrej Consumer Products raised INR 2.50 billion through a three-month CP at 5.93%, while Godrej Properties borrowed the same amount for the same tenure at 6.10%.

  

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 for the same tenure were 5.95–5.98%, dealers said.

 

Union Bank of India was the sole issuer of CDs, raising INR 20.00 billion through a two-and-a-half-month paper at 5.85%. The bank has CDs worth INR 21.50 billion maturing this month.

 

Issuance of certificates of deposit by banks remained muted for the third consecutive day. Banks are staying on the sidelines as rates for CDs are elevated, dealers said. "Rates usually inch up during the quarter-end period as investors already know the demand for funds will tick up from banks," a dealer at a state-owned bank said.

 

The US Federal Open Market Committee meeting, scheduled for Sept. 16–17, is also keeping banks cautious, a dealer at another state-owned bank said. "Rates in the CD market are likely to adjust as per the US meeting outcome, which is discouraging banks from tapping the market at current higher levels." 

 

The indicative rates for CDs remained unchanged from Thursday, dealers said. Rates on three-month CDs were 5.85–5.90%, and rates on six-month CDs were 6.15–6.20% and those on one-year paper were 6.35–6.40%, they said.

  

--Primary market

* Godrej Consumer Products, Godrej Properties, ICICI Securities, Axis Finance, HDFC Securities, and Bajaj Finance Securities raised funds through CPs.

* Union Bank of India raised funds through CDs.

 

--Secondary market

* Axis Bank's CD maturing Monday was traded five times at a weighted average yield of 5.4446%.

* Reliance Jio Infocomm's CP maturing Monday was traded seven times at a weighted average yield of 5.4473%.

 

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
Friday	Thursday	Friday	Thursday
150.80	116.75	68.75	47.55

 

End

 

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

 

Edited by Saji George Titus

 

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