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Informist, Monday, Nov. 24, 2025

By Vaishali Tyagi

MUMBAI – Borrowing via certificates of deposit and commercial papers remained low for the second day Monday as borrowers stayed on the sidelines due to low funding requirements. Mutual funds, major investors in short-term paper, were also inactive in short-term debt market, holding back to participate in corporate bond market Tuesday, dealers said.

Some dealers said mutual funds are hesitant to invest in CPs and CDs, preferring to tap the corporate bond market instead. With issuances from Small Industries Development Bank of India, National Bank for Agriculture and Rural Development, and Axis Bank lined up for Tuesday, mutual funds held back funds in anticipation of better opportunities. 

Issuances aggregating to INR 251.10 billion are scheduled for Tuesday. Power Finance Corp. Ltd. plans to raise up to INR 60 billion, National Bank for Agriculture and Rural Development will raise up to INR 70 billion, and Axis Bank Ltd. will raise up to INR 50 billion Tuesday. The Small Industries Development Bank of India will raise up to INR 60 billion Tuesday.

As per the latest data from the Reserve Bank of India, it net absorbed INR 1.51 trillion Sunday, similar to Friday and Saturday. The net absorption figure is a proxy for the systemic liquidity surplus. Ample systemic liquidity also kept banks away from borrowing in the short-term debt market, dealers said. "Some banks are issuing based on their needs, but there are not big issuances as most have covered this month's maturities," a dealer at a state-owned bank said. "Banking system liquidity stayed in surplus all week and in comfortable range."

Only three banks borrowed funds via CDs Monday. Dealers said the CD market was active all day, with issuers and investors struggling to agree on rates earlier. Some deals concluded towards the closing of market hours. Canara Bank raised INR 20 billion through the issuance of six-month paper at 6.23%. Punjab National Bank raised INR 10 billion through a three-month CD at 5.95%. Bank of India raised INR 4.50 billion through a three-month maturity CD at 5.99%.

Dealers said indicative rates on CDs remained unchanged Monday. Indicative rates on three-month CDs were 5.96-6.02%, same as on Friday. Rates on six-month and one-year CDs were also steady at 6.20–6.23% and 6.40–6.45%, respectively.

Companies tapped the CP market only to meet immediate funding needs, dealers said. Most had already rolled over maturing issues by borrowing aggressively earlier and they see no urgent need for funds. "It (activity) was quite muted today...some corporates tapped the market but most were present with small quantum barring 1-2 big NBFCs (non-banking financial companies)," the dealer quoted above said. 

Commercial papers worth INR 29.25 billion were issued Monday, almost unchanged from INR 29.50 billion issued Friday. Bajaj Finance was the largest issuer. It raised INR 9 billion through a three-month CP at 6.48%. Tata Power borrowed INR 5.0 billion through a three-month CP at 6.08%. Other CP issuers included Godrej Housing Finance, Axis Securities, Birla Group Holding, Julius Baer Capital, Pilani Investments, and Aditya Birla Money. 

Rates in the secondary CP market were steady as demand and supply were balanced. The indicative rates on CPs remained unchanged Monday as demand from issuers was met easily by mutual funds, dealers said. Rates on three-month paper 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 Friday.

--Primary market

* Tata Power, Godrej Housing Finance, Bajaj Finance, Axis Securities, Birla Group Holding, Julius Baer Capital, Pilani Investments, Aditya Birla Money raised funds through CPs

* Punjab National Bank, Bank of India, Canara Bank raised funds through CDs

--Secondary market

* HDFC Bank's CD maturing on Dec. 4  was traded once at a weighted average yield of 5.8018%

* Aditya Birla Capital's CP maturing Tuesday was traded thrice at a weighted average yield of 5.5245%

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 Vandana Hingorani

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