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Informist, Thursday, Jul. 9, 2026

 

By Meera Nair

 

MUMBAI – Yields on commercial papers rose by up to 10 basis points across most tenors in the secondary market Thursday as risk-off sentiment continued to weigh on investor appetite, while certificates of deposit were largely steady amid renewed buying interest from mutual funds after inflows eased redemption pressure, dealers said.

 

Mutual funds, which had turned cautious in recent sessions because of redemption pressure, were seen returning to the market after receiving fresh corporate inflows, supporting demand for certificates of deposit. However, dealers said investors remained selective in commercial papers amid ongoing uncertainty over risk sentiment.

 

In the commercial paper market, three-month AAA-rated papers issued by non-banking finance companies were broadly unchanged at 6.90-7.00%. Six-month yields rose 10 basis points to 7.30-7.35% from 7.20-7.25% Wednesday, while one-year yields eased 10 basis points to 7.50-7.55% from 7.60-7.65%. "For tomorrow (Friday) and the coming weeks, we expect levels to ease because mutual funds are showing buying interest again. Their redemption pressure has reduced as corporate inflows have resumed," a dealer at a private-sector bank said.

 

Three-month AAA-rated certificate of deposit yields were largely unchanged at 6.60-6.70%. Six-month yields eased 5 basis points to 6.80-6.85% from 6.85-6.90% Wednesday, while one-year yields were steady at 7.10-7.20%. Trading activity in CDs was concentrated in January-February-March maturities, with both banks and mutual funds active on the buying as well as selling side.

 

Certificate of deposit turnover rose modestly to INR 62.20 billion as of 1723 IST from INR 60.95 billion Wednesday, according to data from the Clearing Corp of India Ltd. Commercial paper turnover, however, declined sharply to INR 25.85 billion from INR 52.85 billion.

 

Primary market activity also moderated after heavy fund-raising at the start of the July quarter. Certificate of deposit issuance fell to INR 23.50 billion as of 1807 IST from INR 47.25 billion Wednesday. Union Bank of India and UCO Bank were the only issuers. Union Bank raised INR 19.25 billion through two CD, while UCO Bank raised INR 3.0 billion through 83-day papers at 6.80%, according to CCIL data.

 

Commercial paper issuance also declined to INR 23.33 billion from INR 30.93 billion Wednesday as issuers cut-off borrowing after meeting funding requirements at the beginning of the Jul-Sept quarter. Major issuers included UltraTech Cement, CESC, Samvardhana Motherson International, Axis Securities, Kotak Securities, Godrej Properties, Nu Vista, Himadri Speciality Chemical, and Ashoka Buildcon.

 

"Banks are having enough liquidity and funds with them that's why they are not coming up with any fresh issuances now," the dealer from the private-sector bank said. The Reserve Bank of India's net liquidity absorption--a proxy for surplus liquidity in the banking system--fell to INR 741.81 billion Wednesday from INR 1.26 trillion Tuesday, according to the latest data. 

 

--Primary market
* Union Bank of India and UCO Bank were the only issuers of CD Thursday.   

* Ultratech Cement, CESC, Samvardhana Motherson International, Axis Securities, Kotak Securities, Godrej Properties, Nu Vista, Himadri Speciality, and Ashoka Buildcon were among the CP issuers Thursday.

 

--Secondary market

* HDFC Bank Ltd.'s CD maturing on Aug. 5 was traded once at a weighted average yield of 6.30%
* Aditya Birla Capital Ltd.'s CP maturing Friday was traded once at a weighted average yield of 5.33%

 

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed on CCIL's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Thursday	Wednesday	Thursday	Wednesday
62.20	60.95	25.85	52.85

 

End

 

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

 

Edited by Deepshikha Bhardwaj

 

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