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Informist, Friday, May 8, 2026

 

By Nandini Sinha

 

MUMBAI – Issuances of certificates of deposit rose Friday, with private sector banks issuing most of the short-term debt instrument. IDBI Bank Ltd. raised INR 2 billion through a three-month CD at 6.72%, Informist reported earlier.

As of 1756 IST, certificates of deposit worth INR 29.5 billion were issued Friday, according to data from the Clearing Corp. of India Ltd. This was up from INR 21.5 billion worth of certificates of deposit issued Thursday. Commercial papers worth INR 70.80 billion were issued Friday.

 

Trading activity in the CD market is expected to remain subdued due to ample liquidity in the banking system, dealers said. "As of now, there are no CD issuances in the pipeline. Because there is 2.5 lakh crore (INR 2.5 trillion) liquidity and VRR (variable rate repo auction) also happened which was not expected," a dealer from a private sector bank said. The net liquidity absorbed by the RBI – an indication of surplus liquidity in the banking system – was INR 2.37 trillion Thursday, down from INR 2.65 trillion Wednesday.

 

"For the coming weeks, can't expect anything as everything depends on Trump. Morning market is different and evening market is totally different from the morning scene...so coming weeks are unpredictable," the dealer from the private sector bank said. 

 

Issuances of CPs could rise as they are cheaper for borrowers, a dealer at a public sector bank said. "Companies are managing long term (requirements) through borrowings in the short term. The yields on corporate bonds have gone up. So they (companies) are borrowing through CPs...CD/CPs are more accessible," the dealer from the public sector bank said. 

 

Volumes of certificates of deposit and CPs fell sharply in the secondary market Friday. In the secondary market, the traded volume for certificates of deposit fell to INR 74.95 billion Friday from INR 146.90 billion Thursday, while volume for CPs fell to INR 39.89 billion from INR 161.55 billion Thursday.

 

The three-month AAA-rated CD was traded at 6.55-6.60% Friday from 6.50-6.60% Thursday in the secondary market, while a AAA-rated six-month CD was traded at 6.95-7.00%, up from 6.90-7.00% Thursday. The rate on a one-year CD was sharply down at 7.10% levels from 7.25-7.30% Thursday.

 

A three-month commercial paper issued by the National Bank for Agriculture and Rural Development was traded at 6.55-6.60%, while its six-month CP was dealt at 6.30-6.35%.

 

Indian Bank, HDFC Bank Ltd., IndusInd Bank Ltd. and Central Bank of India also issued certificates of deposit Friday. IndusInd Bank and Indian Bank raised INR 7.5 billion each through a three-month CD at 6.80% and 6.55%, respectively. HDFC Bank raised a total of INR 12.50 billion through two certificates of deposit. Central Bank of India raised INR 3 billion through a three-month CD at 6.57%. 

 

Grasim Industries Ltd. and L&T Metro Rail (Hyderabad) Ltd. were among those that issued CPs. Grasim Industries raised INR 7.5 billion at 6.60% through a three-month CP, while L&T Metro Rail (Hyderabad) raised INR 3.45 billion at 6.90% through a 41-day CP. 

 

--Primary market
* IDBI Bank and HDFC Bank were among those that issued certificates of deposit

* Grasim Industries Ltd. and L&T Metro Rail (Hyderabad) were among those that raised funds via CPs

 

--Secondary market

* Bank of India's CD maturing Monday was traded four times at a weighted average yield of 5.15%
* Muthoot Finance Ltd.'s CP maturing Monday was traded twice at a weighted average yield of 5.25%

 

Following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed by Clearing Corp. of India's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Friday	Thursday	Friday	Thursday
74.95	146.90	39.89	161.55

 

End

 

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

 

With inputs from Meera Nair

Edited by Avishek Dutta

 

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

 

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