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Informist, Thursday, Jan. 22, 2026

By J. Navya Sruthi

MUMBAI – Issuances of certificates of deposit and commercial papers picked up in the primary market as yields fell from the previous day across tenures, dealers said. There was a correction in yields of CDs and CPs as mutual funds started buying short-term debt instruments, fund managers and dealers said. 

Canara Bank, ICICI Bank, Bank of Baroda, HDFC Bank, National Bank for Agriculture and Rural Development, Indian Bank, Export-Import Bank of India, and IndusInd Bank raised over INR 240 billion in CDs maturing in one year. 

Yields on one-year and six-month CDs fell, which led to higher issuances in the primary market Thursday, issuers said. Rates on one-year paper were 6.95-6.97% Thursday, sharply down from 7.20% Wednesday, dealers said. Rates on six-month CDs fell to 7.07% from 7.12-7.17% Wednesday, while those on three-month CDs remained flat at 7.05-7.10%, traders said.

Market participants expect more banks to raise funds through CDs in the one-year segment, particularly after Thursday's yield decline.   

Fund managers and dealers said that mutual funds started buying as they found rates attractive. "Mutual funds were holding cash. There was no cash crunch. Why would we invest when it is not attractive? So there was selling as there was also redemption pressure," a fund manager at a domestic fund house said.

Earlier this week, there was hardly any supply of six-month and one-year CDs as issuers stayed away amid higher yields in those segments, dealers said. This led to lower supply, resulting in a fall in yields, which was seized upon by most banks and other institutions, dealers said.

In the commercial paper market, fundraising through CPs rose to INR 31.50 billion Thursday. Cholamandalan Finance was the largest issuer, raising INR 20 billion through three CDs. Axis Finance raised INR 6.5 billion through CPs maturing in three months. Other issuers included Birla Group Holding and IGH Holding. 

Trading volume of CDs in the secondary market was INR 94.75 billion Thursday, down from INR 119.85 billion Wednesday while that of CPs was at INR 45.58 billion, up from INR 35.74 billion Wednesday.

--Primary market

* Canara Bank, ICICI Bank, Bank of Baroda, HDFC Bank, NABARD, Indian Bank, EXIM Bank, and IndusInd Bank raised funds through CDs.

* Birla Group Holding, IGH Holding, Axis Securities, and Cholamandalan Finance raised funds through CPs. 

--Secondary market

* IndusInd Bank's CD maturing Friday was traded twice at a weighted average yield of 5.4758%

* Small Industries Development Bank of India's CP maturing Friday was traded four times at a weighted average yield of 5.2568%

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:

End

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

Edited by Saji George Titus

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