Informist, Monday, May 8, 2023

By Vishal Sangani

MUMBAI – Punjab National Bank was the lone issuer of certificates of deposit today. The state-owned bank raised 30 bln rupees through papers maturing in three months at 7.23%, tapping the market to meet fresh capital requirements and to roll over papers set to mature in the coming days, dealers said.

Other banks stayed on the sidelines as they did not feel the need to raise funds on an immediate basis and as liquidity in the banking system is in surplus.

Liquidity in the banking system is currently estimated to be in a surplus of 782.91 bln rupees, up from 701.06 bln rupees on Thursday. The surplus is expected to narrow due to outflows on account of excise duty payments, which are expected today, dealers said.

Outflows on account of payments for government bonds auctioned on Thursday may also result in fall in liquidity. The government raised 330 bln rupees through the sale of securities at the auction.

Rates on short-term debt papers were in a narrow range due to steady demand from mutual funds, dealers said.

There is a steady inflow in liquid funds of mutual funds, which they are deploying in such papers. They are also reinvesting the funds received from maturity of short-term papers.

Rates on three-month CDs quoted at 7.15-7.35%.

Rates on three-month commercial papers issued by non-banking finance companies quoted at 7.40-7.60%, while rates on papers of manufacturing companies were at 7.25-7.50%.

Indian money markets were shut on Friday on account of Buddha Purnima.

L&T Metro Rail (Hyderabad) and Reliance Industries tapped the market to meet their funding needs and to roll over papers set to mature in the coming days, dealers said.

So far today, CPs aggregating 30.00 bln rupees were issued, against 36.75 bln rupees on Thursday. Reliance Industries raised 30 bln rupees through papers maturing in July at 7.15%.

Supply by non-banking finance companies was also low because they have already rolled over papers set to mature in the next few days, dealers said.

--Primary market

* L&T Metro Rail (Hyderabad) and Reliance Industries raised funds through CPs.

--Secondary market

* Canara Bank's CD maturing on May 17 was dealt four times at a weighted average yield of 7.0269%

* Mahindra & Mahindra Financial Services' CP maturing on Aug 14 was dealt two times at a weighted average yield of 7.3599%

At 1630 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 Ashish Shirke

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