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Informist, Monday, Dec. 8, 2025

By Vaishali Tyagi

NEW DELHI – Borrowing through certificates of deposit and commercial paper fell significantly Monday as major borrowers stayed on the sidelines because of lower funding requirements amid ample liquidity in the banking system, dealers said. The Reserve Bank of India's net absorption from the banking system--a proxy for the liquidity surplus--was INR 2.15 trillion Sunday, up slightly from Saturday's 2.09 trillion.

Dealers said some companies tapped the CP market for immediate funding requirements, but overall primary market activity was subdued. A few corporations with paper maturing soon met their requirements with small issuances but the overall participation was limited and the quantum of issuances was small.

Commercial paper worth INR 26.8 billion were issued Monday, down significantly from INR 125.75 billion Friday, according to dealers. Godrej & Boyce and Tata Power Finance were the largest issuers, each raising INR 5 billion through paper maturing in three months. Other major issuers were Tata Realty and Infrastructure, Godrej Properties, Tata Projects, Tata Housing Development Co., and Pilani Investments. Most of the CP issued are maturing in three months.

Overall activity in the secondary market for CP also remained low Monday. Indicative rates remained unchanged as demand from issuers was met easily by investors. Rates on three-month paper issued by manufacturing companies remained unchanged from Friday at 5.98-6.15%. Rates on paper of similar maturity issued by non-banking finance companies were at 6.57-6.68%, also broadly unchanged from Friday.

Fundrasing through CP rose significantly Friday after the RBI's Monetary Policy Committee lowered the policy repo rate by 25 basis points to 5.25% in a unanimous decision. The committee retained its "neutral" policy stance though external member Ram Singh was of the view that it should be changed to "accommodative". After the rate cut, the RBI announced durable liquidity infusions in December through INR 1 trillion of open market operations to buy bonds and a $5 billion dollar-rupee buy-sell swap. 

Meanwhile, major banks stayed away from the primary market, dealers said. No bank raised funds through the issuance of CD Monday. On Friday, they had issued CD worth INR 8.5 billion. However, the trading volume of CD nearly doubled in the secondary market as mutual funds actively bought and sold short-term debt paper, driven by easing liquidity and available cash. Indicative rates on three-month CD were 5.91-6.00% Monday, broadly unchanged from Friday. Rates on six-month and one-year CD were steady at 6.22-6.27% and 6.39–6.43%, respectively. 

--Primary market

* Network18 Media & Investments, Godrej & Boyce, Godrej Industries, Tata Power, Tata Realty and Infrastructure, Godrej Properties, Tata Projects, Tata Housing Development Co., Pilani Investments, IGH Holdings raised funds through CP

* No funds were raised through CD

--Secondary market

* Axis Bank's CD maturing Wednesday was traded twice at a weighted average yield of 5.4949%

* Bajaj Finance's CP maturing Wednesday was traded thrice at a weighted average yield of 5.1837%

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 Rajeev Pai

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