Informist, Friday, Nov 3, 2023

By Sony 

MUMBAI – Fundraising through commercial papers rose today due to a big-ticket issuance by Cholamandalam Investment & Finance Co, dealers said. 

So far, companies and financial institutions have raised 31.5 bln rupees through CPs, against 21.25 bln rupees on Thursday. Of the total funds raised, Cholamandalam Investment & Finance Co raised 15 bln rupees through papers maturing in January at 7.79%. 

Large issuances in the short-term debt market were readily absorbed by mutual fund houses amid steady inflows into liquid schemes of mutual funds. Adequate demand from mutual fund houses kept rates on short-term papers flat today, dealers said.

Rates on three-month CPs issued by non-banking finance companies were quoted at 7.70-7.90%. Rates on three-month papers issued by manufacturing companies were quoted at 7.35-7.55%.

Rates on three-month certificates of deposit were quoted at 7.25-7.45%. Indian Bank was the sole issuer of CDs. The bank raised 25 bln rupees through papers maturing in January at 7.23%.

On Thursday, HDFC Bank had raised 28.5 bln rupees through papers maturing in three months at 7.25%.

"Issuances are expected to rise as there is a credit requirement. The banking system doesn't have that much liquidity and, due to Diwali, people will borrow more, which will also lead to a rise in issuances in the near future," a dealer with a mid-sized brokerage firm said.

Liquidity in the banking system was estimated to be in a deficit of 169.51 bln rupees, as against 545.34 bln rupees on Thursday.

Outflows on account of excise duties of around 500 bln rupees and tax deducted at source are expected to start next week and will again widen the liquidity deficit in the banking system, dealers said.

--Primary market

* Cholamandalam Investment & Finance Co, Aditya Birla Housing Finance, ICICI Securities, Larsen & Toubro, and Aditya Birla Fashion and Retail raised funds through CPs.

* Indian Bank raised funds through CDs.

--Secondary market
* ICICI Bank's CD maturing on Nov 10 was dealt thrice at a weighted average yield of 6.9063%
* HDFC Securities' CP maturing on Monday was dealt at a weighted average yield of 6.7441%.

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:

NOTE: Details of the deals have been received from market sources.

End

Edited by Maheswaran Parameswaran

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