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Informist, Tuesday, Nov. 25, 2025

By Vaishali Tyagi

MUMBAI – Issuances in the short-term debt market surged Tuesday as banks and companies rushed to meet their rollover requirements for the week, dealers said. Issuances also increased as mutual funds invested in debt instruments to lock in higher yields, anticipating a 25-basis-point rate cut by the Reserve Bank of India's Monetary Policy Committee next week, they said. This follows RBI Governor Sanjay Malhotra Monday reiterated that latest economic data raised scope for a rate cut. However, some traders were also uncertain about the timing of the rate cut, whether the MPC will cut rates next week or in February, they said.

"Yes, investors are active...investors want to lock in high yields before any possible rate cut," a fund manager at a mutual fund house said. "For issuers, it's not ideal because if rates fall later, they'll end up borrowing today at a higher cost. So the momentum you're seeing in short-term papers is mainly investor demand, not issuer comfort."

Primary issuances in the CP-CD market have picked up, driven by large companies and non-banking financial companies meeting their November rollover requirements, dealers said. "This week also there are quite a few maturities, and quantum is also big for that also traders were issuing today (Tuesday)," a dealer at a brokerage firm said.

On the certificates of deposit front, three banks together raised INR 79 billion, significantly higher from INR 34.50 billion on Monday. Union Bank of India was the largets CD issuer. The state-owned lender borrowed INR 54.00 billion through a six-month paper at 6.23%. Another state-owned lender, Bank of Baroda raised INR 15.00 billion by issuing a one-year paper at 6.39%. Federal Bank raised INR 10.00 billion through a six-month paper at 6.33%.

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

Total issuances of commercial papers rose to INR 124.50 on Tuesday from INR 29.25 billion on Monday. Export-Import Bank of India was the largest issuer. It raised INR 25 billion through a three-month CP at 5.91%. Kotak Securities borrowed INR 29.00 billion through through papers maturing in three-months. ICICI Securities raises INR 21.00 billion through the issuance of two-papers maturing in three months. Other major CP issuers included Aditya Birla Housing Finance, CanFin Homes, Godrej Properties, Bajaj Finance Securities, Poonawala Fincorp, and Axis Securities. 

Indicative rates on CPs remained unchanged Tuesday as most of the demand from issuers was easily met by investors. Rates on three-month papers issued by manufacturing companies remained unchanged from Monday at 6.03-6.12%. Rates on papers of similar maturity issued by non-banking finance companies were at 6.66-6.76%, also broadly unchanged from Monday.

--Primary market

* Export-Import Bank of India, Aditya Birla Housing Finance, CanFin Homes, Alembic Pharma, Godrej Properties, L&T Finance, Kotak Securities, ICICI Securities, Axis Securities, Bajaj Finance Securities, Poonawala Fincorp, IGH Holdings, Aseem Infrastructure Finance, Godrej Finance, Aditya Birla Money, FedBank Financial Services, Godrej Finance, FedBank Financial Services, Small Industries Development Bank of India raised funds through CPs

* Union Bank of India, Federal Bank, Bank of Baroda raised funds through CDs

--Secondary market

* Union Bank's CD maturing on Wednesday was traded four times at a weighted average yield of 5.4008%

* Reliance Retail Ventures's CP maturing Thursday was traded four times at a weighted average yield of 5.8072%

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 Akul Nishant Akhoury

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