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Informist, Wednesday, Oct. 29, 2025

By Vaishali Tyagi

MUMBAI – Fundraising through certificates of deposit and commercial paper remained subdued on Wednesday, with only two big-ticket issuances. Mutual funds, the most active participants, are facing pressure due to tight liquidity in the banking system and are demanding higher rates, deterring some potential issuers from raising funds, dealers said. "A few banks and companies looked to raise funds but struggled to conclude deals as their rate expectations were not matched, investors (mostly mutual funds) demanding higher rates," a dealer at a mid-sized brokerage firm said.

As per the latest data from the Reserve Bank of India, the central bank's net injection into the banking system – a proxy for a deficit – was INR 80.84 billion Tuesday, against 208.62 billion Monday. 

Dealers said most banks, manufacturing companies, and non-bank finance companies have met their roll-over demand for October, which also contributed to low issuances. In the commercial paper market, there were no issuances Wednesday, compared with INR 40.25 billion issued Tuesday, as most companies had already rolled over their maturing papers by borrowing aggressively earlier this week.

Rates in the three-month papers issued by manufacturing companies rose 2-4 basis points Wednesday to 6.00-6.10% from 5.98-6.07% on Tuesday, dealers said. Rates on similar maturity papers issued by non-banking financial companies were at 6.66-6.77%, broadly unchanged from 6.65-6.77% Tuesday, dealers said.

There were just two issuances in the CD market Wednesday. Union Bank of India raised INR 15 billion through a paper maturing in May at 6.23%, while Indian Bank raised INR 10.00 billion through a similar maturity paper at the same coupon. Banks tapped the short-term debt market to fulfil their funding requirements amid lower liquidity in the banking system, dealers said. On Tuesday, banks borrowed INR 46.00 billion via CDs.

Meanwhile, indicative rates for three-month CDs were 5.93-6.03%, unchanged from Tuesday. Yields on papers with six-month and one-year maturities also remained unchanged at 6.20–6.25% and 6.42–6.47%, respectively, dealers said.

--Primary market

* Union Bank of India and Indian Bank raised funds through CDs.

--Secondary market

* Bank of Baroda's CD maturing on Nov. 3 was traded once at a weighted average yield of 5.7277%.

* Godrej Agrovet's CP maturing Thursday was traded once at a weighted average yield of 5.6219%.

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:

End

Edited by Saji George Titus

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