Informist, Tuesday, Nov 28, 2023

By Sony and Asmita Patil

MUMBAI - Fundraising through commercial papers fell today due to lack of big ticket issuances, dealers said. So far today, companies and financial institutions have raised 13.85 bln rupees through CPs compared to 30 bln rupees on Friday.

On Friday, Reliance Industries Ltd was the major issuer of CPs, raising 22 bln rupees through papers maturing in three months at 7.35%.

Companies and financial institution raised 260 bln rupees through CPs as of Nov 23, as compared to 163 bln rupees in October, according to a research report by India Ratings. 

"CP requirement of corporates has increased for the month of November despite high rates in the money market," India Ratings said.

After rising by around 5-10 basis points last week, rates on short-term debt instruments remained flat today, dealers said.

Rates on three-month CPs issued by non-banking finance companies were quoted at 7.80-8.00%. Rates on papers of similar maturity issued by manufacturing companies were quoted at 7.35-7.55%.

The rating agency expects issuances of CPs to remain high amid "busy credit season, volatile commodity prices and elevated energy cost." 

Rates on three-month certificates of deposit were quoted at 7.25-7.45%. Bank of Maharashtra was the sole issuer of CDs, raising 15 bln rupees through papers maturing in three months at 7.40%. 

Persistent tight liquidity in the banking system coupled with strong credit growth will lead to a rise in issuances of CDs, India Ratings said. 

Liquidity in the banking system has remained in deficit for most part of November due to outflows on account of the festive season and limited spending by the government. At the end of trade on Friday, liquidity in the banking system was in a deficit of 1.17 trln rupees, as against 1.58 trln rupees on Thursday. 

--Primary market

* Sundaram Home Finance, UltraTech Cement, Aditya Birla Money, ICICI Securities, Godrej Industries, and Cholamandalam Investment & Finance Co raised funds through CPs.

* Bank of Maharashtra raised funds through CDs.

--Secondary market
* Indian Bank's CD maturing on Thursday was dealt seven times at a weighted average yield of 7.0472%.

* National Bank for Agriculture and Rural Development's CP maturing on Dec 13 was dealt four times at a weighted average yield of 7.1845%

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 Vandana Hingorani 

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