Informist, Friday, Jun 9, 2023

By Vishal Sangani and Asmita Patil

MUMBAI – Fundraising through commercial papers rose today amid increased demand for funds as market participants digested the Reserve Bank of India's monetary policy decision, dealers said. The issuances also increased as few companies tapped the market to roll over their existing debt.

On Thursday, the RBI's rate setting panel unanimously decided to keep the repo rate unchanged at 6.5%, and it retained the "withdrawal of accomodation" stance.

So far today, companies and institutions raised 38.50 bln rupees through CPs as against 1.50 bln rupees on Thursday.

Lacklustre participation on Thursday on caution over the RBI's Policy decision led to fall in fundraising through CPs, dealers said.  

Manufacturing companies were major issuers in the market raising today, raising 27 bln rupees of the total funds raised. NPTC was the biggest issuer, raising 17 bln rupees through papers maturing in three months at 6.91%.

From non-banking finance companies front, Mahindra & Mahindra Financial Services raised 7.5 bln rupees at 7.14% rate. PNB Housing Finance tapped for the first time since Feb 1, and raised 4 bln rupees at 7.65% rate. 

Despite a surge in issuances, rates on short-term papers remained unchanged today due to steady demand from mutual funds, dealers said.

There is a steady inflow in liquid funds of mutual funds, which is being deployed short-term papers. Mutual funds are also reinvesting the funds received from maturity of short-term papers, dealers said. 

Rates on three-month CPs issued by non-banking financial were quoted at 7.10-7.25%, and rates on papers of manufacturing companies were quoted at 7.00-7.20%. 

Rates on three-month certificates of deposit were at 6.90-7.10%. However, banks did not issue any certificates of deposit today as there was no immediate need for funds.

--Primary market

* PNB Housing Finance, Mahindra & Mahindra Financial Services, Larsen & Toubro, and NTPC raised funds through CPs.

--Secondary market

* Punjab National Bank's CD maturing on Wednesday was dealt nine times at a weighted average yield of 6.6491%

* Reliance Retail Ventures' CP maturing on Monday was dealt thrice at a weighted average yield of 6.6466%

At 1700 IST, 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

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

Edited by Vidhi Verma

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