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Informist, Tuesday, Jul. 21, 2026

 

By Meera Nair

MUMBAI – Yields on certificates of deposit and commercial papers were mixed across tenors on Tuesday as investors remained cautious amid escalating tensions in West Asia, with uncertainty over the geopolitical situation limiting trading activity, dealers said.

 

Market participants said investors refrained from taking fresh positions because of uncertainty over developments in West Asia and their potential impact on global financial markets. "Rates are largely flat up to the three-month segment, but there were hardly any trades across tenors today (Tuesday)," a dealer at a public-sector bank said.

 

Three-month AAA-rated certificates of deposit were quoted at 6.85-6.90%, 5 basis points higher than 6.80-6.85% on Monday. Six-month yields eased to 6.90-6.95% from 7.00-7.10%, while one-year yields fell 5 bps to 7.15-7.20% from 7.20-7.30%. Dealers said activity was largely confined to papers maturing within one month and those in the November-December maturity bucket, where investors preferred taking positions ahead of the quarter-end.

 

Yields on AAA-rated commercial papers issued by non-banking finance companies were largely unchanged across key tenors. There were no trades in the three-month and one-year segments, while six-month yields declined 10 bps to 7.30-7.35% from 7.40-7.45% on Monday.

 

Primary issuance of certificates of deposit rose to INR 20.90 billion from INR 13.00 billion on Monday, according to data from Clearing Corp. of India Ltd. Only two banks tapped the market. Indian Bank raised INR 19.65 billion through 30-day and 337-day CDs at 6.25% and 7.15%, respectively, while Union Bank of India raised INR 1.25 billion through 91-day CDs at 6.85%, CCIL data showed.

 

Commercial paper issuance also increased, although dealers said overall activity remained below normal levels. CP issuance rose to INR 91.55 billion as of 1700 IST from INR 39.60 billion on Monday. Among the major issuers, Export-Import Bank of India raised INR 22.75 billion through 143-day papers at a weighted average yield of 6.90%. Sikka Ports and Terminals Ltd. raised INR 11.00 billion through 87-day papers at 6.95%, while NTPC Ltd. and Titan Co. Ltd. raised INR 10.00 billion each at 6.29% and 6.70%, respectively. Other issuers included ICICI Securities, Aditya Birla Finance Ltd., Tata Realty and Infrastructure Ltd., Hero Fincorp, and Kotak Securities.

 

In the secondary market, turnover in certificates of deposit rose to INR 73.70 billion at 1714 IST from INR 39.00 billion on Monday, according to CCIL data. Commercial paper turnover, however, fell to INR 17.00 billion from INR 43.10 billion.

 

"If you look at today's (Tuesday) CCIL data, most of the activity was in the eight- to nine-month segment, especially papers maturing in December, as the market is approaching the quarter-end. Participants have relatively better confidence in that segment, while sentiment across the rest of the curve depends largely on how the West Asia situation evolves," the dealer said.

 

Dealers said investors were closely tracking developments in the region and awaiting further comments from US President Donald Trump on the conflict. "We are monitoring every update on the geopolitical situation, including any statement from President Trump," another dealer said.

 

Meanwhile, the Reserve Bank of India's net liquidity absorbed, which is a proxy for banking system liquidity surplus, was INR 695.96 billion on Monday, down from INR 844.20 billion Sunday due to some outflows for GST payments, dealers said.

 

Dealers expect liquidity conditions to remain somewhat tight through the month-end before improving in early August. "Liquidity is likely to stay on the lower side over the next few days because of month-end outflows. It should improve in early August, so there is nothing to be concerned about," another public-sector bank dealer said.

 

--Primary market
* Indian Bank and Union Bank were the only CD issuers Tuesday.   

* EXIM, Sikka Ports and Terminals, NTPC Ltd. and Titan Co. Ltd., ICICI Securities, Aditya Birla Finance Ltd., Tata Realty and Infrastructure Ltd., Hero Fincorp, and Kotak Securities were among the CP issuers Tuesday.

 

--Secondary market

* Bank of Baroda's CD maturing thursday was traded three times at a weighted average yield of 5.66%
* Axis Securities Ltd.'s CP maturing Wednesday was traded twice at a weighted average yield of 5.31%

 

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
Tuesday	Monday	Tuesday	Monday
73.70	32.75	17.00	43.10

 

End

 

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

 

Edited by Deepshikha Bhardwaj

 

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