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Informist, Tuesday, Oct. 14, 2025

By Vaishali Tyagi

MUMBAI – Borrowing through the short-term debt market fell Tuesday owing to the low requirement of funds amid comfortable liquidity, dealers said. Tuesday, INR 39.5 billion was raised through commercial paper, down from INR 78.5 billion Monday, while INR 20.0 billion was mobilised through certificates of deposit against INR 28.0 billion the previous day.

The banking system liquidity surplus, as measured by the RBI's net liquidity absorbed, fell to INR 1.30 trillion Monday from INR 1.55 trillion Sunday. The liquidity surplus fell on account of payments of INR 280 billion for Friday's gilts auction, which was settled Monday.

Bajaj Finance was the biggest CP issuer Tuesday, raising INR 18.75 billion through two paper of different maturities. The non-banking finance company raised INR 13.75 billion through the issuance of a three-month paper at 6.44% and INR 5.00 billion via paper maturing at the end of January at 6.49%. Reliance Jio and Kotak Mahindra Prime were the other big CP issuers, raising INR 11 billion and INR 4 billion, respectively. Grasim Industries, Godrej Properties, Mahindra & Mahindra Financial Services, and Axis Securities also raised funds through CP.

"Most issuers are tapping the market to roll over papers which are nearing maturity... and some are frontloading as lending in festive season increases... therefore we are seeing some rise in issuances and mainly these are NBFCs," a dealer at a broking firm said. "There is no such thing that people are rushing to issue papers as there is comfortable liquidity in the system, currently everything is on demand-and-supply basis."

The otherwise sluggish market has seen some pick-up in CD activity. Banks that had been absent from the market for the past few days have returned to the short-term debt market this week. Canara Bank, which was the sole CD issuer Tuesday, raised INR 20 billion through an eight-month paper at 6.18%. Punjab National Bank had tapped the market Monday. Indicative rates for three-month CD were 5.85-5.95%, unchanged from Friday. Yields on paper maturing in six months and one year also remained unchanged at 6.15–6.22% and 6.38–6.45%, respectively, dealers said. 

"CD issuances are happening due to several factors, as this is a truncated month, (there is) the festive season, and they expect there can be a potential liquidity crunch due to sudden outflows during the festive season... therefore whatever borrowing is happening now by banks is to manage potential liquidity pressures," the dealer quoted above said.

In the secondary market, rates edged higher during the day due to a minor demand-supply imbalance, but the movement was not significant and the rates settled at the previous day's levels. Market participants are currently awaiting the release Wednesday of the minutes of the Reserve Bank of India's Monetary Policy Committee meeting of Sept. 29-Oct. 1 for clarity on the interest rate outlook.

Indicative rates for three-month CDs were 5.85-5.95%, unchanged from Monday. Yields on paper maturing in six months and one year also remained unchanged at 6.15–6.23% and 6.38–6.45%, respectively, dealers said. Rates on three-month commercial paper issued by manufacturing companies were at 5.95-6.05%, unchanged from Monday. Similarly, paper of the same maturity from non-banking financial companies also remained unchanged at 6.65-6.75%. 

--Primary market

* Grasim Industries, Godrej Properties, Bajaj Finance, Reliance Jio, Mahindra & Mahindra Financial Services, Axis Securities, and Kotak Mahindra Prime raised funds through CP.

* Canara Bank raised funds through CD.

Secondary market

* Indian Bank's CD maturing Thursday was traded once at a weighted average yield of 5.6584%.

* The CP of Toyota Financial Services maturing Wednesday was traded twice at a weighted average yield of 5.4028%.

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:

Edited by Rajeev Pai

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