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Informist, Thursday, Jul. 2, 2026

By Meera Nair

MUMBAI – Yields on certificates of deposit fell across key maturities on Thursday due to steady demand from banks and mutual funds, dealers said. However, yields on longer-tenor commercial papers rose after heavy borrowing by oil marketing companies' increased funding needs, dealers said.

"There were a lot of OMCs (oil marketing companies) in segment maturing up to the September in the CP market today (Thursday) as they were in need of urgent cash," a dealer at a brokerage firm said. "This has pushed the CP rates higher."

The net liquidity absorbed by the RBI--a measure of surplus liquidity in the banking system--fell to INR 864.69 billion on Wednesday from INR 1.13 trillion on Tuesday, reflecting lower surplus funds in the banking system. The decline came as banks increased their cash balances with the RBI to INR 8.78 trillion from INR 7.95 trillion a day earlier.

Three-month AAA-rated CD yields were unchanged at 6.10-6.15%, while the actively traded six-month segment eased 15 basis points to 6.45-6.50% from 6.60-6.65% on Wednesday. One-year CD yields also declined 5 bps to 6.90-6.95% from 6.95-7.00%. 

In CP market, three-month AAA-rated papers issued by non-banking finance companies eased 10 bps to 6.60-6.70%, tracking the broader easing in money market rates. However, one-year CP yields climbed 20 bps to 7.30-7.40% as aggressive borrowing by OMCs reduced investor appetite for longer-tenor papers and left few buyers in the segment, dealers said.

CD trading volume stood at INR 61.85 billion as of 1801 IST, slightly lower than INR 66.25 billion on Wednesday, according to Clearing Corp. of India Ltd. data. CP trading volume, however, surged to INR 40.12 billion from INR 13.50 billion, driven largely by oil marketing companies' related activity.

"Investors continue to watch out for liquidity and rates for tomorrow," the dealer said.

The primary CD market remained inactive, with no fresh issuances for the third consecutive session. Dealers expect supply to resume after the first week of July as issuers return following the start of the new quarter. Commercial paper issuance remained moderate despite higher trading activity. Fresh issuances totalled INR 29.74 billion, compared with INR 18.38 billion on Wednesday.

Issuers included HDFC Securities, Chennai Petroleum Corp. Ltd., Kotak Securities, ICICI Securities, L&T Finance, and ICICI Home Finance Company Ltd. Among the issuers, HDFC Securities raised INR 3.25 billion through a 28-day commercial paper at a weighted average yield of 6.58%. Chennai Petroleum raised INR 6.50 billion through 63-day CP at a weighted average yield of 6.25%. ICICI Securities raised INR 4.50 billion through 270-day CP at 7.22%, while L&T Finance raised INR 3.50 billion through 343-day CP at 7.39%. Other issuers included Godrej Agrovet, IIFL Finance, Time Technoplast, ECL Finance, Ugro Capital, Incred Financial Services, and Arvesta Financial Services Pvt. Ltd. 

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

* HDFC Securities, Chennai Petroleum Corp. Ltd., Kotak Securities, ICICI Securities, L & T Finance, and ICICI Home Finance Company Ltd. were the major issuers of CPs Thursday.

--Secondary market

* IDBI Bank's CD maturing Aug. 6 was traded once at a weighted average yield of 6.20%
* Godrej Consumer Products Ltd.'s CP maturing Monday was traded once at a weighted average yield of 5.99%

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:

End

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

Edited by Akul Nishant Akhoury

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