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Informist, Wednesday, Jan. 21, 2026

 

By J. Navya Sruthi

 

MUMBAI – Rates on certificates of deposit and commercial papers were steady from the previous day, dealers said. The volume of certificates of deposit and CPs in the secondary markets was also up Wednesday as mutual funds were rebalancing their portfolios.

 

"Mutual funds are buying April and May maturity papers which are also attractive...they are kind of rebalancing their portfolios," a dealer at a private bank said. "Rates are expected to stabilise at this level as most mutual funds see this as good level to re-enter," the dealer said. 

 

Borrowing costs on three-month and six-month CDs were steady from the previous day at 7.05-7.10% and 7.12-17%, respectively, Wednesday. Rates on the one-year CDs in fact fell slightly by two basis points in the primary market to 7.20%, dealers said. 

 

Small Industries Development Bank of India raised INR 75 billion through one-year CDs at 7.20%, which is slightly lower than CDs issued by the National Bank for Agriculture and Development at 7.22% Tuesday, dealers said.  

 

"This shows that there is demand at these (current) levels where mutual funds are coming in," a dealer at a state-owned bank said. "We can expect more banks to explore opportunities tomorrow (Thursday) as rates fell by 2 bps," the dealer said. 

 

Currently, there is not much supply in six-month and one-year CDs as issuers are staying away due to higher yields in these segments, dealers said. Most issuers are preferring to issue papers maturing in March or even before, they added.

 

So this would stagnate the supply in six-month and one-year segments and help in stabilising the rates, dealers said. However, in shorter-end papers, yields are seen rising around five to 10 basis points.  

 

Meanwhile, indicative rates on three-month CPs issued by manufacturing companies were also steady from the previous day 7.15-7.20% Wednesday and similarly, those on three-month CPs issued by non-banking financial companies were steady at 7.50-7.55% Wednesday. 

 

Trading volume of CDs in the secondary market was INR 119.85 billion, up from INR 89.18 billion Tuesday while that of CPs were lower at INR 35.74 billion from INR 46 billion Tuesday.

 

--Primary market

* Small Industries Development Bank of India raised funds through CDs

 

--Secondary market

* Small Industries Development Bank of India's CP's maturing Friday was traded twice at a weighted average yield of 5.9870%

* HDFC Bank's CD maturing Thursday was traded nine times at a weighted average yield of 5.3254%

 

The 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
119.85	89.18	35.74	46.00

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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