Informist, Friday, Feb 23, 2024

By Subhana Shaikh

MUMBAI – Fundraising through short-term debt instruments slipped today as issuers had borrowed heavily on Thursday, keeping today's session light amid steady demand from mutual funds, dealers said. Banks and companies raised close to 40 bln rupees through commercial papers and certificate of deposits today, sharply lower than 145 bln rupees raised on Thursday. 

Small Industries Development Bank of India was the largest issuer for the second consecutive session today, raising 15 bln rupees through CPs maturing in three months at 7.75%. On Thursday, SIDBI raised 40 bln rupees through one-year CDs at 7.83%.

"Sentiment is neutral in the market. There was demand today, but issuers were not as keen as yesterday (Thursday)," a dealer at a mid-sized brokerage firm said.

At the end of trade on Thursday, the liquidity deficit in the banking system was at 2.37 trln rupees, as against 2.52 trln rupees at the end of trade on Wednesday, data from the RBI showed. The deficit narrowed as banks received around 200 bln rupees due to the government's spending, dealers said. The spending is likely to continue till the end of the month, including another 200 bln rupees, and may come to a total of around 1 trln rupees, they said.

On the CD front, Canara Bank raised 10 bln rupees through CDs maturing in three months at 7.72%. On Thursday, the state-owned lender raised 30 bln rupees through one-year CDs at 7.78%.  

Overall, rates remained flat owing to steady demand from mutual funds, dealers said. Rates on CPs issued by non-banking financial companies were at 8.35-8.55% and those with similar maturity CPs issued by manufacturing companies were at 7.80-8.00%. Rates on CDs maturing in three months were at 7.75-7.95%. 

--Primary market

* SIDBI, Axis Securities, Godrej Industries, Larsen and Toubro raised funds through CPs.

* Canara Bank raised funds through CDs.

--Secondary market

* Punjab National Bank's CD maturing on Mar 6 was dealt thrice at a weighted average yield of 6.9676%

* Tata Steel' CP maturing on Feb 28 was dealt twice at a weighted average yield of 6.8977%

At 1700 IST, the following were the volumes, in bln rupees, in the secondary market for short-term debt, as detailed by the Clearing Corp of India's F-TRAC platform:

End

Edited by Tanima Banerjee

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