More Stories

Informist, Thursday, Feb. 5, 2026

By Vaishali Tyagi and J. Navya Sruthi

NEW DELHI – Yields on short-term debt instruments fell further Thursday on active participation from mutual funds and other investors due to comfortable systemic liquidity, dealers said. "Liquidity is comfortable, therefore, we are witnessing good investor interest these days and yields are also down, which is bringing more and more issuers...apart from it, let us see what MPC (Reserve Bank of India's Monetary Policy Committee's meeting outcome) brings for the market", a dealer at a brokerage firm said.  

The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – fell to INR 1.96 trillion Wednesday from INR 2.17 trillion Tuesday. The slight fall in liquidity was on account of payment for state bonds auctioned by the RBI on Tuesday, dealers said.

On Thursday, yields on three-month certificates of deposit were at 6.96% down from 6.98% Wednesday. Yields on one-year CDs were at 6.90%, slightly lower from 6.92% the previous day. Yields on six-month CDs were also down at 7.03-7.7% from 7.05-7.10% the previous day, dealers said. 

The high liquidity surplus kept issuances in the primary market on higher side Thursday. The total CD issuances in the primary market on Thursday was at INR 175 billion compared to INR 205 billion on Wednesday. Punjab National Bank raised INR 100 billion through seven CD. Canara Bank has raised INR 16.50 billion Thursday through two certificates of deposits at 6.98% as yields have softened by 2 to 3 basis points. The bank has raised INR 10 billion through a CD maturing on Jun. 22 and INR 6.50 billion through a CD maturing on Jun. 10. Other major CD issuers included HDFC Bank, IndusInd Bank, and Indian Bank.

Yields on three-month CPs issued by non-banking financial companies were fell marginally to 7.43-44% from Wednesday's rates at 7.45%. Yields on three-month commercial papers issued by manufacturing companies were nearly flat at 7.14-7.19%, dealers said. 

After taking cues from the US' trade deal with India, the market now awaits the Reserve Bank of India's Monetary Policy Committee's meeting decision due Friday. Dealers expect the central bank to announce more measures to support the systemic liquidity, which will weigh on yields. A few dealers expect the central bank to conduct longer-tenure variable rate repo auctions and open market operations auctions. Some dealers also expect a cash reserve rato cut by the central bank.

Total CP issuances in the primary market were INR 55 billion down from INR 80.5 billion Wednesday. National Bank for Agriculture and Rural Development and Small Industries Development Bank of India raised INR 20 billion each via three month CPs. Other issuers included Aditya Birla Housing Finance, Bajaj Finance and Tata Capital. 

Trading volume of CDs in the secondary market was INR 250.30 billion Thursday, up from INR 172.75 billion Wednesday. Trading volume of CPs was INR 103.85 billion, significantly higher than INR 63.25 billion Wednesday. Dealers attributed ample liquidity surplus in the banking for rise in activity in secondary market of short-term debt market. 

--Primary market

* Punjab National Bank, HDFC Bank, Canara Bank, IndusInd Bank, Indian Bank, and SIDBI raised funds through CDs

* Bajaj  Finance, NABARD, SIDBI, Aditya Birla Housing Finance, Aditya Birla Money, Tata Capital, and Birla Group Holding raised funds through CPs.

--Secondary market

*NABARD's CP maturing Friday was traded four times at a weighted average yield of 4.6693%

*HDFC Bank' CP maturing Friday, was traded sixteen at a weighted average yield of 4.7146%

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

Edited by Deepshikha Bhardwaj

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.