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Informist, Monday, Oct. 27, 2025

 

By Vaishali Tyagi

 

MUMBAI – Issuances in the short-term debt market rose sharply Monday as banks and companies flocked to the market to fulfil their rollover requirements for October amid insufficient liquidity in the banking system, dealers said. Mutual funds were seen actively investing in the debt instruments, they said. "Many companies and banks tapped the market to fulfill their roll-over requirements," a dealer at a brokerage firm said. "Some movement was also seen in rates due to tighter liquidity environment but investors showed good interest."

 

Total issuances of commercial papers rose to over INR 103.00 billion Monday, from 18.25 billion worth of CP issuance reported Friday. Small Industries Development Bank of India was the largest CP issuer, raising INR 60.00 billion through a three-month paper at 6.05%. The other major CP issuer was Tata Power Ltd., which raised INR 5.00 billion through papers maturing in threee months at 6.15%. Most of the non-banking financial companies tapped the market to roll over upcoming maturities, dealers said. Other CP issuers included Kotak Securities Ltd., Bajaj Housing Finance Ltd., Tata Projects Ltd., Motilal Oswal Financial Services Ltd., and Axis Securities Ltd. 

 

Despite the sharp rise in issuances, the indicative rates in the CP market remained broadly unchanged from Friday as issuers' demand comfortably fulfilled investors' requirement, dealers said. Rates on three-month CPs issued by manufacturing companies were 5.98-6.07% on Monday, same as Friday. Rates on similar maturity papers issued by non-banking financial companies were at 6.66-6.77%, broadly unchanged from 6.65-6.77% Friday, dealers said.

 

Issuances of certificates of deposits rose, with two banks cumulatively raising INR 35.00 billion, up from Friday's INR 17.25 billion. Union Bank of India borrowed INR 20 billion through three-month papers at 5.99% while Indian Bank raised INR 15 billion through papers maturing in April at 6.25%. 

 

Due to the increased demand for funds amid tighter liquidity conditions, the indicative rates in the three-month CD market rose slightly from Friday, dealers said. Indicative rates for three-month CDs were 5.93-6.03%, up from 5.90-6.00% on Friday. Yields on papers maturing in six months and one year also moved slightly higher to 6.20–6.25% and 6.42–6.47%, respectively, dealers said.

 

"Liquidity was not at comfortable level in banking system and demand for funds by banks led to slightly higher CD rates today (Monday), though change in rates was not that significant," a dealer at another brokerage firm said. 

 

--Primary market

* HDB Financial Services, Kotak Securities, Bajaj Financial Securities, SIDBI, Bajaj Housing Finance, Axis Securities, Tata Power, Tata Realty & Infra, Tata Projects, Poonawalla Fincorp, Kotak Securities, Birla Group Holding, Julius Baer Capital, Aditya Birla Money, Motilal Oswal Financial Service, ICICI Securitie raised funds through CPs

* Union Bank of India, Indian Bank raised funds through CD

 

--Secondary market

* Bank of Baroda's CD maturing on Nov. 3 was traded once at a weighted average yield of 5.7725%

* Nxtra Data Ltd.'s CP maturing Tuesday was traded once at a weighted average yield of 5.7679%

 

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
69.05	79.00	20.10	16.80

 

End

 

Edited by Tanima Banerjee

 

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