More Stories

Informist, Thursday, Nov. 6, 2025

By Vaishali Tyagi

NEW DELHI – The volume of transactions in certificates of deposit rose sharply in the secondary market Thursday as mutual funds showed strong interest in CD amid easing liquidity conditions, dealers said. With mutual funds having cash available following the return of banking liquidity to a more comfortable level, some investors also saw an opportunity to encash their investments, they said.

Dealers said mutual funds are focusing on longer-tenure paper and shifting to corporate bonds. HDFC Bank and Union Bank of India were also reportedly issuing CD, while HDFC Securities and Godrej Industries were issuing CP. Some corporations, however, preferred to invest through the secondary market instead of participating in the primary market, they said.

Dealers said the volume in the secondary market for CD was good, but rates remained unchanged as buying demand was met adequately by sellers. The volume of CD transactions rose to INR 141.75 billion, more than double Tuesday's volume of INR 69.95 billion. Indicative rates for three-month CD were 6.00-6.10%, unchanged from Tuesday. Yields on six-month and one-year CD also remained unchanged at 6.20–6.25% and 6.42–6.47%, respectively.

The central bank's net absorption from the banking system--a proxy for the liquidity surplus-–was INR 2.19 trillion on Tuesday, up from INR 1.75 trillion Monday. The liquidity surplus crossed the INR 2-trillion mark Tuesday primarily due to redemptions and coupon payments of bonds. The government's month-end inflows for salary and pension payments, and the cut in the cash reserve ratio to 3.25% of the net demand and time liabilities of banks, which came into effect Saturday, also increased the liquidity surplus by over INR 1 trillion.

Volumes in the market for commercial paper remained broadly unchanged at INR 34.35 billion, against INR 34.50 billion reported Tuesday. Dealers said that owing to requirement-based participation, rates on three-month paper issued by manufacturing companies remained unchanged from Tuesday at 6.03-6.13%. Rates on paper with similar maturity issued by non-banking finance companies were at 6.66-6.77%, also broadly unchanged from Tuesday.

--Secondary market

* Small Industries Development Bank of India's CD maturing Friday was traded once at a weighted average yield of 5.2933%

* Indian Oil Corp.'s CP maturing Friday was traded five times at a weighted average yield of 5.2603%

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 Rajeev Pai

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.