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Informist, Thursday, Sept. 18, 2025

By Shravani Chandiwade

MUMBAI – The quantum of funds raised in the short-term debt market Thursday was INR 70.50 billion, sharply down from INR 103.00 billion raised Wednesday. This was as expected by traders as issuers had aggressively raised funds earlier in the week.

Only two non-banking financial companies raised funds through commercial papers. Aditya Birla Capital raised INR 15.00 billion through a three-month CP at 6.50%. The company has INR 31.75 billion worth of CPs maturing this month and so far it has raised INR 10.00 billion.  

Kotak Securities was the second CP issuer. The company raised INR 2.00 billion through a three-month paper at 6.57%. "CP volume this week is a bit lower compared to the volume raised last week...," a dealer at a state-owned bank said. "Majority of the issuers in the CP market have already met their maturities. The rest, which have maturities, are seen borrowing minimal quantum." Dealers said the papers maturing this month have been largely rolled over and the volume of CP issuances will not be very high until the end of September.

The indicative rates for CP issued by non-banking financial companies for a three-month tenure were unchanged from Wednesday at 6.70–6.75% and rates for papers of the same tenure issued by manufacturing companies were 5.95–5.98%, dealers said.

As for certificates of deposit, most banks have already met their upcoming maturities, dealers said. Issuances in the CD market Thursday totalled INR 53.50 billion, slightly down from INR 55.00 billion Wednesday with only three banks issuing CDs. Most issuances were concluded in the latter part of the session as some issuers and investors struggled to find common ground on rates.

Bank of Baroda stood out as a large issuer as it borrowed INR 27.00 billion through an eight-month CD at 6.27%. The bank had already rolled over its existing maturities of INR 22.40 billion of CDs earlier in the month, with Thursday's being an additional issuance.

Union Bank of India was the other large issuer, raising INR 10.00 billion through a five-month CD at 6.10%. With this, the bank has rolled over its obligations from CD worth INR 21.50 billion maturing this month.

"With liquidity in the banking system having drained sharply, banks are expected to tap the market actively," a dealer at another state-owned bank said. As per latest data, the net liquidity absorbed by the Reserve Bank of India – a proxy for the systemic liquidity surplus – was INR 637.45 billion on Wednesday, the lowest since Apr. 22 and lower than INR 705.79 billion Tuesday.

Banks are expected to raise funds as the quarter-end approaches, as has been the case over the past week, dealers said.  

Rates on three-month CD were down 2–3 basis points, dealers said. The indicative rates on CD were 5.80–5.85%. Rates on six-month CDs were 6.15–6.20% and those on one-year were 6.35–6.40%, they said.

--Primary market

* Kotak Securities and Aditya Birla Capital raised funds through CPs.

* Union Bank, Punjab and Sind Bank, Bank of Baroda raised funds through CDs.

--Secondary market

* HDFC Bank's CD maturing Friday was traded 10 times at a weighted average yield of 5.6466%.

* Bharti Telecom's CP maturing Friday was traded 13 times at a weighted average yield of 5.6756%.

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 Ashish Shirke

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