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Informist, Thursday, Apr. 8, 2026

By Vaishali Tyagi

NEW DELHI – Rates on certificates of deposits and commercial papers fell further Thursday due to firm demand amid low supply in the primary market, dealers said. Mutual funds were buying short-term papers to deploy excessive cash available with them after the redemption pressure is over, they added. 

"Mutual funds are very active these days as they have inflows coming...also their redemption pressure is over," a dealer at a brokerage firm said. "Primary market is mostly dry if we talk particularly about banks, there is complete dryness. However, few corporates (companies) are issuing commercial papers, therefore, investors are more active in secondary market as they have surplus of cash with them."

In the secondary market, rates for three-month certificates of deposit fell to 6.15-6.20% Thursday from 6.45-6.50% Wednesday, while those on six-month CD fell to 6.70-6.75% from 7.00% in the previous session. Rates on one-year CD were in the range of 6.88-6.95%, down from 7.10-7.12%, dealers said.

The fall in certificate of deposit rates was limited as traders were cautious due to the hazy picture around the ceasefire in the war between the US, Israel and Iran. Tensions rose after Israel attacked Lebanon, threatening the ceasefire agreement. Iran claimed Lebanon was part of the agreement, while the US said it wasn't. This led to Iran closing the Strait of Hormuz, just a day after reopening it. 

No certificates of deposit were issued in the primary market Thursday as most banks stayed on the sidelines, according to data available on the Clearing Corp. of India F-TRAC platform. On Wednesday, RBL Bank, which raised INR 10 billion, was the sole issuer. The primary CD market was quiet as major banks held back, citing typically low credit demand in April, dealers said. With credit growth expected to be slow this month, banks are unlikely to issue certificates of deposit unless necessary, they said. 

Primary issuances in the commercial paper market remained higher due to increased borrowing from large companies and non-banking financial companies as they flocked to the market to fulfil their rollover requirements due this week, dealers said. Primary borrowing through commercial papers on Thursday totalled INR 143.40 billion, lower than 225.53 billion Wednesday. Even though volume fell compared to Wednesday, it was still on the higher side.

National Bank for Agriculture and Rural Development was the biggest CP issuer on Thursday. The company raised INR 36.00 billion through CP maturing on Jul. 1 at 6.56%. ICICI Securities raised INR 7.75 billion through two papers. Other major issuers included Godrej Industries, IIFL Capital Services, Incred Financial Services also raised funds via commercial paper. NABARD has a paper worth INR 19 billion maturing Friday, while ICICI Securities has commercial papers worth INR 4.40 billion maturing this week, according to data on Clearing Corp. of India Ltd. Rates on three-month commercial paper issued by non-banking finance companies fell to 6.70-7.00% from 6.90-7.10% Wednesday.

Trading volume in the secondary market of certificates of deposit was INR 140.73 billion Thursday, up from INR 112.90 billion Wednesday. The traded volume of commercial papers rose to INR 45.20 billion from INR 23.90 billion Wednesday. 

--Primary market

* No funds were raised funds via CD

* NABARD, Godrej Industries, IFL Capital Services, Incred Financial Services and ICICI Securities raised funds via CP

--Secondary market

* Axis Bank's CD maturing on Apr. 20 was traded once at a weighted average yield of 5.9993%

* HDFC Securities' CP maturing on Apr. 15 was traded once at a weighted average yield of 6.0528%

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 Deepshikha Bhardwaj

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