Informist, Tuesday, Feb 27, 2024

By Asmita Patil

MUMBAI – Rates on short-term debt instruments fell slightly today on improved demand from mutual fund houses, dealers said. "There was traction on the buying side... mutual funds have received flows and have been deploying (the money) aggressively," a dealer with a mid-sized brokerage firm said. 

Rates on three-month commercial paper issued by non-banking finance companies fell to 8.25-8.45% from 8.35-8.55% on Monday. Rates on CPs of similar maturity issued by manufacturing companies fell to 7.76-7.96% from 7.80-8.00% on Monday.

Rates on certificates of deposit maturing in three months also fell to 7.68-7.88% from 7.72-7.92% on Monday. Banks were major issuers in the short-term debt market. HDFC Bank, Indian Bank, and Union Bank raised over 100 bln rupees through CDs, dealers said.

HDFC Bank became the largest issuer by raising 50 bln rupees through CDs maturing in three months at 7.70%. "HDFC (Bank) doesn't issue much in the three-month segment, so today's issuance got good demand as there are limits available with mutual funds," a dealer at a big brokerage firm said. The bank also raised 23 bln rupees through CDs maturing in one year at 7.83%.

Indian Bank raised 30 bln rupees through CDs maturing in three months at 7.70%. Bank of Baroda was also negotiating with investors to raise funds through certificates maturing in three months at 7.68%, dealers said.

Funds raised through CPs also rose amid improved demand, dealers said. So far today, companies and financial institutions have raised 101.60 bln rupees through CPs, against 30.75 bln rupees on Monday.

Reliance Retail Ventures and Bajaj Finance raised 15 bln rupees each through CPs maturing in three months at rates of 7.76% and 7.80%, respectively. LIC Housing Finance raised 15 bln rupees through CPs maturing in one year at 7.85%. 

--Primary market

* ICICI Securities, Bajaj Finance, Aditya Birla Finance, Poonawalla Fincorp, Aditya Birla Money, Reliance Retail Ventures, Tata Power Co, LIC Housing Finance, Tata Motors Finance, Tata Motors Finance Holdings, and National Bank for Agriculture and Rural Development raised funds through CPs.

* HDFC Bank, Union Bank of India, and Indian Bank raised funds through CDs.

--Secondary market

* Union Bank's CD maturing on Mar 5 was dealt twice at a weighted average yield of 7.0549%.

* HDFC Bank's CD maturing on May 21 was dealt at a weighted average yield of 8.3501%.

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

End

Edited by Rajeev Pai

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