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Informist, Friday, Nov. 28, 2025

By Vaishali Tyagi

MUMBAI – Borrowing activity through issuance of certificates of deposit and commercial papers slumped Friday as companies had met requirements earlier in the week, leaving no immediate funding needs amid ample liquidity in the banking system, dealers said. Mutual funds were active in the secondary market, both buying and selling short-term debt papers, dealers added.

"Overall activity in the primary market remained very dull today (Friday), there were no major deals," a dealer at a brokerage firm said. "A few non-banking financial companies were seen but no major fundraising was seen as month-end has come, therefore we do not see any major CP-CD issuances as well."

A majority of banks remained on the sidelines, avoiding borrowing from the market due to ample liquidity surplus in the banking system and due to low funding requirements, which resulted in unchanged indicative CD rates, dealers said. There was only one bank that raised INR 2 billion via CDs, significantly lower from INR 79 billion on Thursday. Punjab National Bank was the sole CD issuer. The state-owned lender borrowed INR 2 billion through a three-month paper at 5.87%. The Reserve Bank of India's net absorption from the banking system – a proxy for liquidity surplus – was INR 1.27 trillion Thursday, up from INR 1.15 trillion Wednesday. 

Indicative rates on three-month CDs were 5.95-6.01%, broadly unchanged from 5.96-6.02% on Thursday. Rates on six-month and one-year CDs were steady at 6.20–6.23% and 6.40–6.45%, respectively. 

The primary market activity in CPs also remained dull, with one non-banking financial company tapping the market to raise funds, dealers said. Axis Securities borrowed INR 2.5 billion through the issuance of three-month CPs maturity at 6.53%. Indicative rates on CPs remained unchanged from Thursday as most of the demand from issuers was easily met by investors. Rates on three-month papers issued by manufacturing companies remained unchanged from Thursday 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 Thursday. 

Dealers said secondary market activity was dull, mirroring the fall in primary market activity. Mutual funds traded selectively, buying and selling based on their needs, without taking any bold positions. Trading volume dropped from Thursday's levels.

--Primary market

* Axis Securities raised funds through CPs

* Punjab National Bank raised funds through CDs

--Secondary market

* Axis Bank's CD maturing on Monday was traded twice at a weighted average yield of 5.5000%

* Indian Oil Corp.'s CP maturing Monday was traded seven times at a weighted average yield of 5.5668%

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 Tanima Banerjee

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