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Informist, Monday, Oct. 6, 2025

 

By Vaishali Tyagi

 

MUMBAI – Primary issuances in the commercial paper market rose due to increased borrowing from non-banking finance companies, dealers said. Primary borrowing through CP on Monday totalled INR 26.50 billion, higher than INR 6 billion Friday. 

 

L&T Finance was the biggest CP issuer on Monday. The company raised INR 17.50 billion through CP maturing in same month at 6.20%. Kotak Mahindra Prime and Shree Cement were the other issuers. Kotak Mahindra Prime raised INR 8.00 billion through seven-day CP at 6.30%, while Shree Cement raised INR 1.00 billion through the issuance of CP maturing in December at 5.82%. 

 

After three consecutive days of inactivity, one bank turned to the certificate of deposit market on Monday. IDFC First Bank Ltd. raised INR 10.00 billion through a seven-month paper at a yield of 6.31%. Banks avoided the market due to ample liquidity surplus and low funding needs, resulting in stable indicative CD rates.

 

The RBI Sunday net absorbed INR 1.75 trillion from the banking system, a proxy for systemic liquidity surplus, higher than INR 1.70 trillion on Saturday. A cut in the cash reserve ratio of 25 basis points which came into effect Saturday, is expected to further improve the system liquidity, dealers said. This was the second 25-bps cut in the CRR in the ongoing cycle of the 100 bps of cut announced in August, and brought down the CRR to 3.50%. The CRR cut on Saturday is expected to infuse INR 600 billion to INR 700 billion of durable liquidity into the system. However, one banks tapped the primary market to raise money through certificates of deposit.

 

Indicative rates for three-month CDs were 5.85-5.90%, unchanged from Friday. Yields on papers with six-month and one-year maturities also remained unchanged. Yields on six-month tenure CDs were 6.10–6.15% and those on one-year papers were 6.35–6.40%, dealers said. Indicative rates for three-month papers issued by non-banking financial companies were at 6.65-6.70% and yields on similar-term papers issued by manufacturing companies were at 5.95-6.00%. 

 

--Primary market

* L&T Finance, Kotak Mahindra Prime, Shree Cement raised funds through CP.

* IDFC First Bank raised funds through CD.

 

--Secondary market

* Canara Bank's CD maturing Tuesday was traded once at a weighted average yield of 5.3911%.

* Godrej Properties Ltd.'s CP maturing Tuesday was traded once at a weighted average yield of 5.5028%.

 

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
Monday	Friday	Monday	Friday
89.90	N.A	35.35	N.A

 

 

Edited by Deepshikha Bhardwaj

 

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