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Informist, Thursday, Sept. 10, 2026

 

By Vaishali Tyagi 

 

NEW DELHI – Yields on six-month and one-year short-term debt instruments rose marginally on weak investor appetite, dealers said. Rates on three-month certificates of deposit and commercial paper remained broadly steady, they said. "Most investors are aggressive in the three-month segment, as people are awaiting clarity on the longer tenors," a dealer at a brokerage firm said. "The rise in crude (oil) prices has again created uncertainty, which has dented investor appetite and pushed rates on the longer end higher across markets." Crude oil prices remained well above the crucial $100 per-barrel mark throughout the day, weighing on market sentiment.

 

Dealers said rates did not rise sharply in any segment Thursday, though there was a slight uptick in instruments of six-month maturity and above. Most investors limited their bets to shorter tenures to assess the liquidity and interest rate scenario before taking exposure to longer maturities, they said. Yields on "AAA"-rated three-month CDs were at 5.85-5.95% Thursday, unchanged from 5.85-5.90% the previous day. Yields on six-month CD rose to 6.55% from 6.40-6.45% Wednesday while yields on one-year CD were at 7.00%, up from 6.90-6.95%.

 

The supply of certificates of deposit remained low owing to the high surplus liquidity in the banking system, dealers said. A few issuers tapped the market but no deals materialised as there was hardly any investor appetite, they said. Mutual funds, the major investors in this segment, largely stayed away from the primary market because of redemption pressures, dealers said. The RBI's net liquidity absorbed, an indicator of the banking system liquidity surplus, was INR 10.50 trillion Wednesday, little changed from INR 10.49 trillion Tuesday.

 

There were no major deals in the primary market for certificates of deposit Thursday with issuances aggregating to INR 30 billion, against just INR 7.50 billion Wednesday, according to data from Clearing Corp. of India Ltd. Punjab & Sind Bank raised INR 20 billion through two separate debt securities. Central Bank of India raised INR 2.50 billion at a weighted average yield of 6.00% through 91-day CD while Bank of India borrowed INR 7.50 billion via 186-day CD at 6.55%.

 

In the CP market, primary issuances rose from the previous session due to rollover requirements of non-baking financial companies, dealers said. Primary issuances were INR 196.70 billion, up from INR 181.43 billion Wednesday, according to CCIL data. Yields on "AAA"-rated three-month CP issued by non-banking financial companies were at 6.50-6.60% Thursday, largely steady against 6.50-6.55% Wednesday. Yields on six-month CP were at 7.00%, up marginally from 6.85-6.90% Wednesday, while yields on one-year CP were at 7.30-7.45% from 7.20-7.30%. 

 

Kotak Mahindra Investments raised INR 10.25 billion through a seven-day CP at a weighted average yield of 6.50% while Power Finance Corp. raised INR 29.85 billion through a 90-day CP. Other key issuers were Bharat Heavy Electricals, IIFL Finance, Kotak Securities, Bajaj Financial Securities, Godrej Properties, and Aditya Birla Money.

 

In the secondary market, CD market volume was at INR 115.80 billion Thursday, down from INR 136.98 billion Wednesday, while the CP market volume rose to INR 113.60 billion from INR 74.70 billion.

 

--Primary market

* Punjab & Sind Bank, Central Bank of India, and Bank of India were the CD issuers.

* Kotak Mahindra Investments, Power Finance Corp., Bharat Heavy Electicals, IIFL Finance, Kotak Securities, Bajaj Financial Securities, Godrej Properties, and Aditya Birla Money were among key CP issuers.  

 

--Secondary market

* HDFC Bank's CD maturing Friday was traded eight times at a weighted average yield of 4.72%.
* Small Industries Development Bank of India's CP maturing Friday was traded five times at a weighted average yield of 4.79%.

 

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
Thursday	Wednesday	Thursday	Wednesday
115.80	136.98	113.60	74.70

 

End

 

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

 

Edited by Rajeev Pai

 

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