Short-Term Debt: CD supply up on demand for funds; CP, CD rates rise

Informist, Friday, Jun 17, 2022


By Vishal Sangani


MUMBAI – Funds raised through certificates of deposit surged today as a few banks raised funds to meet fresh requirements for funds and to roll over papers set to mature in the coming days, dealers said.


So far, CDs worth 55.00 bln rupees were issued today, as against 19.50 bln rupees on Thursday.


Banks also tapped the market to meet needs for credit disbursement, and due to a decline in surplus liquidity.


Usually, fundraising by banks rises towards the end of every quarter, as they seek to boost balance sheets.


Liquidity in the banking system is currently estimated to be in a surplus of over 2.86 trln rupees as against 3.46 trln rupees on Thursday. The surplus narrowed sharply due to outflows on account of advance tax payment for Apr-Jun between Wednesday and Thursday.


The surplus is expected to narrow further in the coming days due to outflows on account of goods and service tax payments, dealers said.


Issuances of commercial papers also rose today, as a few companies tapped the market to meet their funding requirements, dealers said. So far today, CPs aggregating 31.25 bln rupees were issued, against 19.00 bln rupees on Thursday. National Bank for Agriculture and Rural Development was the major issuer, raising 12.00 bln rupees through papers maturing in three months at 5.32%.


Rates on short-term debt papers rose today due to a surge in issuances amid low demand from mutual funds, dealers said. Demand from mutual funds was low as they will face redemption pressure from liquid funds due to the quarter-end fund requirements of institutional investors.


Companies usually park their money in liquid schemes to meet their short-term fund requirements, instead of leaving cash idle, resulting in sharp inflows and outflows in the category, on a cyclical basis.


Rates on three-month CPs of non-bank finance companies rose to 5.70-5.90% from 5.55-5.85% on Thursday, while those on papers of manufacturing companies were at 5.45-5.70%, compared with 5.25-5.50% on Thursday.


Rates on three-month certificates of deposit were up at 5.30-5.50%, against 5.15-5.35% on Thursday.


Market participants said the rise in rates was also because after the US Federal Reserve raised interest rates by 75 bps, markets have started pricing a 35-50 bps repo rate hike in August by the Reserve Bank of India.


–Primary market

* Reliance Retail Ventures, Hindustan Petroleum Corp and National Bank for Agriculture and Rural Development raised funds through CPs.

* Canara Bank and HDFC Bank raised funds through CDs.


–Secondary market

* HDFC Bank's CD maturing on Sep 2 was dealt four times at a weighted average yield of 5.2301%

* ICICI Securities' CP maturing on Sep 16 was dealt at a weighted average yield of 5.6901%


At 1530 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 Avishek Dutta


Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.


Informist Media Tel +91 (11) 4220-1000

Send comments to


© Informist Media Pvt. Ltd. 2022. All rights reserved.

Other News

Informist Poll:Fading base effect may drag Jul-Sep GDP growth to 6.3%

Informist, Monday, Nov 28, 2022 By Aditya Saroha and Priyansh Verma NEW DELHI – Growth in the Indian economy likely slowed to 6.3% in Jul-Sep from 13.5% a quarter ago, largely due to fading away of the statistical effect of a low base, according to an Informist poll of 23 economists. At 6.3%, the GDP growth rate will be in […]

Windfall gain tax mop-up about 150 bln rupee so far, says govt source

Informist, Monday, Nov 28, 2022 By Priyasmita Dutta and Sagar Sen NEW DELHI – The government has mopped up about 150 bln rupees so far from the additional tax imposed on windfall gains of domestic crude oil producers and petroleum product exporters following the sharp rise in oil prices globally. "The collection from the windfall gains tax will be nearly 140-150 bln […]

Equity Futures: Bullish bets in upstream oil cos as crude prices fall

Informist, Monday, Nov 28, 2022 By Vaibhavi MUMBAI – Traders aggressively bought futures and options of upstream oil companies today, anticipating more gains in these counters, as a drop in Brent crude oil prices eased pressure on their profitability. Brent crude futures slumped to an over 10-month low of around $81 per barrel as surging COVID-19 cases in China and the consequent […]