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Informist, Tuesday, Oct. 7, 2025

 

By Vaishali Tyagi

 

MUMBAI – Following subdued issuances of certificates of deposit over the past few days, two big-ticket borrowing Tuesday led to a surge in fundraising through the instrument, dealers said. Small Industries Development Bank of India raised INR 38.0 billion through the issuance of one-year CD at 6.42%. Bank of India also tapped the market to raise INR 15.0 billion by issuing five-month CDs at 6.03%. Mutual funds were also seen actively investing in the debt instruments, they said. 

 

Majority of banks continued to remain on the sidelines as they avoided the market due to ample liquidity surplus and low funding requirements, resulting in stable indicative CD rates. The RBI on Monday absorbed INR 1.59 trillion worth of liquidity from the banking system, which is a proxy for systemic liquidity surplus, which is lower than INR 1.75 trillion on Sunday.  

 

Indicative rates for three-month CDs were 5.85-5.90%, unchanged from Monday. 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 6.35–6.45%, dealers said.

 

"We cannot say the market was completely dry today (Tuesday), but yes, issuances are slightly on the lower side for a few days as banks are also sitting with ample cash in hand... why would they need to issue certificates," a dealer at a brokerage firm said. "Going forward, we need to wait for clarity. If lending picks up, we will see a rise in CD issuances."

 

In sharp contrast, commercial paper issuances slumped Tuesday due to low-funding requirements, dealers said. CP issuances fell sharply to INR 1.75 billion on Tuesday, compared to INR 26.50 billion Monday. ICICI Securities Primary Dealership was the top CP issuer, borrowing INR 1.00 billion at 6.45% through papers maturing in December. Godrej Industries raised INR 750 million through the issuance of papers maturing in three months at 6.13%. 

 

--Primary market

* ICICI Securities Primary Dealership and Godrej Industries raised funds through CPs.

* Small Industries Development Bank of India and Bank of India raised funds through CDs.

 

--Secondary market

* Axis Bank's CD maturing Wednesday was traded twice at a weighted average yield of 5.3298%.

* Godrej Properties Ltd.'s CP maturing Wednesday was traded once at a weighted average yield of 5.3663%.

 

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
Tuesday	Monday	Tuesday	Monday
83.15	89.90	45.75	35.35

 

End

 

Edited by Tanima Banerjee

 

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