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Informist, Friday, Oct. 31, 2025

By Vaishali Tyagi

MUMBAI – Fundraising through certificates of deposit and commercial papers rose slightly on Friday due to increased demand for funds amid tighter liquidity conditions in the banking system, dealers said. Liquidity in the banking system remained tight due to outflows for goods and services tax, they said. There is strong demand for funds to meet their requirement, dealers said. Some initial public offerings lined up this week and the next are also likely to draw funds away from the money markets, they said.

"For the whole week, trend was almost same, that some NBFCs (non-banking financial companies) and a few banks came to market to raise funds but there was not active participation from mutual funds, therefore, even some major deals were not concluded," a dealer at a mid-sized brokerage firm said.

The central bank's net absorption from the banking system--a proxy for liquidity surplus--was INR 84.76 billion Thursday, against INR 145.90 billion Wednesday. Inflows from the government's routine salary, pension and subsidy payout were flowing in to the banking system but this was getting offset by the RBI's persistent dollar sales to support the rupee, dealers said.

Borrowing through certificates of deposit rose Friday to meet their requirements, dealers said. On Friday, INR 15.75 billion was raised through CPs, up from INR 5.00 billion Thursday. Aditya Birla Housing Finance raised INR 3.25 billion at 6.07% through three-month paper. Bajaj Finance borrowed INR 6.25 billion through one-year paper at 6.75%. Other two issuers were Godrej Consumers and Network18 Media and Investments which raised INR 4.00 billion and 2.25 billion through three-month paper. On Thursday, Tata Power Ltd. was the sole CP issuer, raising INR 5 billion through a three-month paper at 6.18%. 

Dealers said due to requirement-based participation, rates in the three-month papers issued by manufacturing remained unchanged at 6.03-6.13% from Thursday. Rates on similar maturity papers issued by non-banking financial companies were 6.66-6.77%, broadly unchanged from 6.65-6.77% Thursday.

On CDs front, Small Industries Development Bank of India was the lone issuer, raising INR 21 billion through paper maturing in one-year at 6.49%. Dealers said that most banks avoided raising funds from the short-term debt market as rates are on the higher side. Thursday, there were just two issuances in the CD market worth INR 25 billion. Indicative rates for three-month CDs were 6.00-6.10%, higher from Thursday's 5.93-6.03%. Yields on papers with six-month and one-year maturities also remained unchanged at 6.20–6.25% and 6.42–6.47%, respectively.

-Primary market

* Aditya Birla Housing Finance, Godrej Consumers, Network18 Media and Investments, Bajaj Finance, raised funds through CPs.

* SIDBI raised funds through CDs.

End

Edited by Deepshikha Bhardwaj

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