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Informist, Thursday, Nov. 20, 2025

 

By Vaishali Tyagi

 

NEW DELHI – Borrowing through the short-term debt market fell Thursday due to low requirement for funds and front-loading on Wednesday, dealers said. Thursday, INR 3 billion was raised through commercial papers, sharply down from INR 40 billion on Wednesday, while INR 35 billion was mobilised through certificates of deposit, significantly down from INR 147 billion the previous day. Some mutual funds, which were major investors in short-term debt papers, were active on both buying and selling front in the secondary market, dealers said.

 

"Today (Thursday) borrowing was low as many players had front-loaded funds on Wednesday when rates were down...even when rates are same as yesterday (Wednesday), and on lower side, yet issuers were not that active," a dealer at a brokerage firm said. "Also, liquidity in the system is at comfortable level, so no urgent for funds was seen in the market by borrowers," a dealer at a brokerage firm said.

 

Dealers said fund raising through these instruments is likely to remain on the lower side Friday as most rollover requirements have already been met. The central bank's net absorption from the banking system – a proxy for the liquidity surplus – was INR 1.72 trillion Wednesday, down from INR 1.75 trillion Tuesday. The marginal change in the liquidity surplus suggested that there were no large outflows for GST payments Wednesday as some traders had expected, dealers said.

 

Three companies raised INR 1 billion each through the issuance of papers maturing in three months. Aditya Birla Money raised funds at 6.88%, IGH Holdings borrowed capital at 6.85%, and ICICI Securities raised at 6.59%.

 

As demand and supply was balanced, rates in the secondary market remained unchanged. The indicative rates on CP remained unchanged Thursday as demand from issuers was easily met by mutual funds, dealers said. Rates on three-month papers issued by manufacturing companies remained steady at 6.00-6.10%. Rates on papers of similar maturity issued by non-banking finance companies were at 6.58-6.65%, also broadly unchanged from Wednesday.

 

On the CD side, most banks stayed on the sidelines after borrowing heavily on Wednesday, dealers said. With ample liquidity surplus and low funding needs, major banks remained on sidelines, keeping indicative CD rates unchanged, they said. Canara Bank raised INR 30 billion through three-month CD at 5.94% and Federal Bank raised INR 5 billion through a paper of same maturity at 6.03%.

 

Dealers said indicative rates on CDs remained largely unchanged Thursday. Indicative rates on three-month CDs were 5.96-6.02%, same as Wednesday. Rates on six-month and one-year CDs remained unchanged at 6.20–6.23% and 6.38–6.45%, respectively.

 

--Primary market

* Aditya Birla Money, ICICI Securities, and IGH Holding raised funds through CPs

* Canara Bank and Federal Bank raised funds through CDs

 

--Secondary market

* Canara Bank's CD maturing on Friday was traded twice at a weighted average yield of 5.4028%

* Reliance Retail Venture's CP maturing Friday was traded eight times at a weighted average yield of 5.4253%

 

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
Thursday	Wednesday	Thursday	Wednesday
79.60	79.30	69.50	73.50

 

End

 

Edited by Ashish Shirke

 

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