More Stories

Informist, Friday, Oct. 10, 2025

 

By Vaishali Tyagi

 

MUMBAI – Rates in the short-term debt market ended slightly higher due to increased demand for funds amid tighter liquidity conditions driven by a series of high-profile initial public offerings, dealers said. These public offerings locked up capital for several financial institutions, leading to higher weighted average rate in the triparty repo market, which involves mutual funds, which in turn affected rates in the short-term debt market. Higher borrowing rates in turn led to muted issuances in the primary market, dealers said.  

 

Additionally, dealers pointed out mismanagement in the effective allocation of funds, with market participants parking INR 468.60 billion worth of funds with the Reserve Bank of India at its variable rate reverse repo auction on Thursday. This further exacerbated demand for funds in the short-term debt market. 

 

"Rates increased slightly due to a liquidity crunch, driven by corporates and mutual funds seeking funds to invest in upcoming IPOs," a dealer at a large state-owned bank said. "Even though, RBI did VRR (variable rate repo) auction later which gave some relief to the market participants but borrowers continued to demand funds."

 

There was no certificate of deposit issuance in the primary market Friday. Additionally, several planned deals, including a proposed CD issuance by the Small Industries Development Bank of India, failed to materialise. Indicative rates on papers with six-month and one-year maturities rose slightly to 6.15–6.20% and 6.38–6.47%, respectively, dealers said.

 

Rates on commercial papers issued by manufacturing companies were at 5.95-6.05%, slightly higher from Thursday. Similarly, papers of the same maturity from non-banking financial companies also rose from Thursday to 6.65-6.75%. The primary market activity in CPs also remained dull on account of the higher borrowing rates, dealers said. Godrej Industries was the sole issuer in the CP market, raising INR 1.50 billion through a three-month paper at 6.15%. 

 

Primary market

* Godrej Industries raised funds through CP.

 

--Secondary market

* Bank of Baroda's CD maturing Friday was traded thrice at a weighted average yield of 5.5280%.

* Bajaj Finance' CP maturing Monday was traded thrice at a weighted average yield of 5.5262%.

 

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
95.80	72.80	33.05	35.79

 

End

 

Edited by Tanima Banerjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.