Short-Term Debt: Birla Group Holdings lone CP issuer; rates flat

Informist, Thursday, Dec 15, 2022


By Vishal Sangani


MUMBAI – Birla Group Holdings Ltd was the lone issuer of commercial papers today. The company raised 250 mln rupees through papers maturing in two months at 7.53%.


On Wednesday, CPs worth 22.50 bln rupees were issued.


There were no big-ticket issuances today and requirement for funds also was low, dealers said.


Some companies also chose against rolling over papers about to mature due to higher rates and a few manufacturing companies turned to banks for loans for their funding needs, dealers said.


Rates on short-term debt papers were flat due to lower issuances, dealers said.


Rates on three-month CPs issued by non-banking finance companies were quoted at 7.20-7.40%, and rates on papers of manufacturing companies were quoted at 6.95-7.15%.


Rates on three-month certificates of deposit were quoted at 6.85-7.10%.


Funds raised through certificates of deposit were marginally lower than Wednesday as few banks tapped the market for their funding needs, dealers said.


So far today, CDs worth 24.00 bln rupees were issued, as against 25.00 bln rupees on Wednesday. HDFC Bank was the major issuer. It raised 14 bln rupees through papers maturing in one year at 7.58%.


Supply of CDs is expected to rise in the coming days, as banks will tap the market to meet strong growth in credit and due to decline in surplus liquidity.


CD issuances will also surge at the end of the quarter, as banks borrow funds to meet their requirements and to disburse short-term loans to shore up their balance sheets.


According to latest data from the Reserve Bank of India, growth in bank loans remained steady at 17.2% on year to 129.48 trln rupees in the fortnight ended Nov 18. Deposits continued to lag credit growth, growing 9.6% on year to 172.95 trln rupees as on Nov 18.


Liquidity in the banking system is currently estimated to be in a surplus of 1.13 trln rupeesdown from 1.42 trln rupees on Wednesday.


The surplus is expected to narrow further in the coming days due to outflows of 1.00–1.50 trln rupees as advance tax payment for Oct-Dec, which will begin today. Major outflows are expected on Friday, dealers said.


–Primary market

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


–Secondary market

* HDFC Bank's CD maturing on Feb 10 was dealt two times at a weighted average yield of 6.8598%

* Small Industries Development Bank of India's CP maturing on Feb 9 was dealt at a weighted average yield of 6.8398%


At 1645 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:


Certificates of deposit

Commercial papers







NOTE: Details of the deals have been received from market sources.




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


Edited by Ashish Shirke


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