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Informist, Monday, Nov. 10, 2025

By Vaishali Tyagi

NEW DELHI – Funds raised through certificates of deposit rose Monday as borrowing rates fell with a rise in the systemic liquidity surplus. Surplus funds with mutual funds, which are major investors in short-term debt paper, kept the market active, traders said. Dealers said issuances in the short-term debt also rose as banks and companies sought to meet their rollover requirements for November.

"Liquidity's improved, and borrowing rates have eased a bit by 2-4 basis points...issuers are grabbing this opportunity, raising money as mutual funds are showing interest," a dealer at a borkerage firm said. "CP (commercial papers) rates are pretty much the same, but the market was active today (Monday) in both markets (CPs and CDs)."

The central bank's net absorption from the banking system – a proxy for liquidity surplus – was INR 2.41 trillion Friday, up from INR 2.32 trillion on Thursday. This is the highest liquidity surplus since Sept. 14. Lack of any significant outflows is expected to keep liquidity in a comfortable surplus this week, dealers said.

On the certificates of deposit front, two banks along with Small Industries Development Bank of India and Export-Import Bank of India together raised INR 75.75 billion from INR 33.00 billion on Friday. SIDBI borrowed INR 42.00 billion through a three-month paper at 6.04%. EXIM Bank also raised INR 25.00 billion by issuing a one-year paper at 6.40%. Indian Bank raised INR 3.75 billion through an 11-month paper at 6.40% and Canara Bank borrowed INR 5.00 billion by issuing a one-year paper at 6.39%.

Dealers said that indicative rates on CDs fell 2-3 bps in three-months paper due to strong demand from mutual funds, which are major investors in this market. Indicative rates for three-month CDs were 5.99-6.07% on Monday from 6.00-6.10% from Friday. Yields on six-month and one-year CDs remained unchanged at 6.20–6.25% and 6.42–6.47%, respectively.

Total issuances of commercial papers rose to INR 94.25 on Monday from 33.75 billion on Friday. Reliance Retail Ventures was the largest CP issuer. It raised INR 33.00 billion through a three-month paper at 6.09%. The other major CP issuer was HDFC Securities, which raised INR 9.00 billion through paper maturing in three months at 6.65%. Other big issuers were Mahindra & Mahindra Financial Services, Tata Capital, Bajaj Auto Credit, and Poonawala Fincorp. Most of the non-banking financial companies tapped the market to roll over upcoming maturities, dealers said. 

Indicative rates on CPs remained unchanged Monday as most of the demand from issuers was easily met by investors. Rates on three-month papers issued by manufacturing companies remained unchanged from Friday at 6.03-6.13%. Rates on papers of similar maturity issued by non-banking finance companies were at 6.66-6.77%, also broadly unchanged from Friday.

--Primary market

* Aditya Birla Housing Finance, Reliance Retail Ventures, Mahindra & Mahindra Financial Services, Tata Capital, Bajaj Auto Credit, Poonawala Fincorp, Cholamandalam Finance, Kotak Securities, HDFC Securities, HSBC Invest Direct Financial Services, and Motilal Oswal Financial Services raised funds through CPs 

* Small Industries Development Bank of India, Export-Import Bank of India, Indian Bank, and Canara Bank, raised funds through CD

--Secondary market

* Axis Bank's CD maturing on Wednesday was traded twice at a weighted average yield of 5.6106%

* Kotak Securities' CP maturing Tuesday was traded twice at a weighted average yield of 5.3095%

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 Deepshikha Bhardwaj

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