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Informist, Wednesday, Dec. 31, 2025

 

By Vaishali Tyagi

 

MUMBAI – Fundraising through issuances of certificates of deposit and commercial papers remained subdued on the last day of 2025 as issuers met their requirements earlier in the month, with borrowers involved in requirement-based deals, dealers said. Lack of any other major need for funds also kept borrowers on the sidelines. 

 

Volume in the primary market of commercial papers rose but overall remained on the lower side. Total issuances of commercial papers rose to INR 18.4 billion on Wednesday compared to none issued on Tuesday. ICICI Securities was the largest issuer. It raised INR 10 billion through a CP maturing in mid-month 6.40%. Another big issuer was ICICI Securities Primary Dealership, which issued CPs maturing in mid-month and borrowed INR 3.5 billion at 6.40%. Other issuers included Kotak Securities and Bajaj Housing Finance.

 

Dealers said companies only tapped the commercial paper market for immediate funding needs, which kept overall primary market activity low. A few corporates with maturity profiles met their requirements with small issuances but overall participation was limited.

 

Overall, there was less activity in the CPs market in the secondary market also, they said. Borrowing costs on the three-month CPs issued by non-banking financial companies were 6.45-6.60% Wednesday, unchanged from Tuesday, while indicative rates on three-month paper issued by manufacturing companies were at 6.05-6.15% Wednesday. 

 

There was no fundraising through certificates of deposit in the primary market Wednesday, compared to INR 83 billion Tuesday. Market participants said some big banks have already met their December quarter-end requirements, with a few front-loading this week to meet rollover needs. Overall investor participation also remained low due to liquidity crunch in banking system and redemption pressure on mutual funds. The net liquidity injected into the banking system by the RBI--a proxy for the liquidity deficit--was INR 86.04 billion Tuesday, against INR 715.84 billion Monday. Mutual funds, key investors in short-term debt, were taking less aggressive positions in the secondary market also, dealers said.

 

Going forward, market participants expect fresh supply of CPs and CDs to pick up when liquidity returns to surplus and rates cool down, which is likely to happen in January. Indicative rates on three-month CDs fell slightly to 5.99-6.07% Wednesday from 6.05-6.12% Tuesday. Rates on six-month and one-year CDs were 6.35-6.45% and 6.60–6.70%, respectively. 

 

Dealers said even though rates fell slightly during the day, they did not see aggressive activity from banks in the primary market. "CD rates came down after 1 PM (1300 IST) as some liquidity came into the system due to government month-end spending," a dealer at a brokerage firm said. "We expect issuances to pick in January after liquidity surplus comes back to the system."

 

--Primary market

* ICICI Securities, ICICI Securities Primary Dealership, Kotak Securities, Bajaj Housing Finance raised through CPs

* No funds raised through CDs

 

--Secondary market

* Bank of Baroda's CD maturing Friday was traded once at a weighted average yield of 6.0062%

* Birla Group Holding's CP maturing Jan. 23 was traded once at a weighted average yield of 6.8006%

 

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
Wednesday	Tuesday	Wednesday	Tuesday
48.30	57.65	7.15	9.20

 

End 

 

Edited by Deepshikha Bhardwaj

 

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