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Informist, Tuesday, Jun. 30, 2026

 

By Meera Nair

 

MUMBAI – Yields on commercial papers and certificates of deposit fell sharply across most tenors Tuesday due to improved demand from banks and mutual funds, dealers said. Expectations of easing liquidity conditions in early July also pushed money market rates lower, they said. There were no fresh issuances of certificates of deposit as banks largely stayed away from borrowing on the last day of the quarter, dealers said. "The rally we saw this week and last week was actually expected next month, but it has come earlier than anticipated," a dealer at a public sector bank said.

 

The net liquidity injected by the Reserve Bank of India into the banking system — a measure of the systemic liquidity deficit — fell to INR 130.77 billion on Monday from INR 415.63 billion Sunday. "We expect liquidity conditions to improve further in the first two weeks of next month, even if the RBI does not conduct any variable rate repo auctions," a dealer at a brokerage firm said.

 

Yields on three-month AAA-rated CDs fell to 6.40-6.45% from 6.50-6.52% on Monday. Six-month CD yields were quoted at 6.70-6.75%. One-year CD yields, however, rose to 6.95-7.00% from 6.85-6.95% on Monday, reflecting relatively weaker demand at the longer end. Yields on three-month AAA-rated commercial papers issued by non-banking financial companies eased to 6.80-6.85% from 6.85-6.90% on Monday. Six-month CP yields declined by around 10 basis points to 7.15-7.20% from 7.25-7.30%, while one-year yields slipped to 7.45-7.50% from 7.50-7.55%.

 

"Mutual funds are expected to receive fresh inflows at the start of the new month, which should boost demand for short-term paper and keep yields under pressure (lower)," the dealer at the brokerage said.

 

In the secondary market, trading volumes in certificates of deposit rose as investors stepped up activity amid the fall in yields. Overall trading volume increased to INR 96.55 billion from INR 76.15 billion on Monday, according to Clearing Corp. of India Ltd. data as of 1714 IST. Commercial paper trading volume also rose to INR 36.93 billion from INR 22.00 billion the previous day. 

 

In the primary market, CPs worth INR 47.28 billion were issued on Tuesday, compared with INR 35.95 billion on Monday. Issuers included Kotak Mahindra, Akara Capital Advisors, HDFC Securities, Chennai Petroleum Corp., JM Financial Securities, Avenue Supermarts, Godrej Finance, and Credila Financial Services. Chennai Petroleum Corp. raised INR 5 billion by issuing 30-day commercial paper at a weighted average yield of 6.30%, while Kotak Mahindra raised INR 2 billion through a June 2027 maturity paper at a weighted average yield of 7.50%. 

 

--Primary market
* There were no CD issuances Tuesday.  

* Akara Capital Advisors, HDFC Securities, Chennai Petroleum Corp., Larsen & Toubro, JM Financial Securities, Avenue Supermarts, Godrej Finance, and Credila Financial Services were the major issuers of CPs Tuesday.

 

--Secondary market

* Canara Bank's CD maturing Wednesday was traded six times at a weighted average yield of 5.42%
* L&T Finance's CP maturing Wednesday was traded three times at a weighted average yield of 5.62%

 

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed on CCIL's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Tuesday	Monday	Tuesday	Monday
96.55	76.15	36.93	22.00

 

 

End

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

 

Edited by Saji George Titus

 

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