Informist, Wednesday, Jan 11, 2023

By Vishal Sangani

MUMBAI – A large issuance by National Bank for Agriculture and Rural Development led to a spike in funds raised through commercial papers today.

Financial institutions tapped the market to meet their funding requirements, dealers said.

So far today, CPs issued aggregated 52.30 bln rupees, compared with 29.25 bln rupees on Tuesday. NABARD raised 50 bln rupees through papers maturing in June at 7.37%.

The supply of papers by big-ticket issuers was readily absorbed because of their low risk profile.

However, market participation was thin because of low requirement for funds and rollover of papers in the primary market, dealers said.

Only two companies issued commercial papers, compared with seven companies on Tuesday.

Union Bank of India was the lone issuer of certificates of deposit. The state-owned bank raised 40 bln rupees at 7.77% through papers maturing in one year. The lender tapped the market for its funding needs and to meet the strong growth in credit, dealers said.

On Tuesday, Axis Bank was the only issuer of CDs. It raised 12.00 bln rupees.

Most banks were on the sidelines as there is no immediate need for funds and in view of the prevailing surplus liquidity in the banking system, dealers said.

Liquidity in the banking system is currently estimated to be in a surplus of 807.76 bln rupees, up from 736.32 bln rupees on Tuesday.

Despite surge in supply, rates on short-term debt instruments were in a narrow range due to steady demand from mutual funds, dealers said.

There is a steady inflow in liquid funds of mutual funds, which they are deploying in such papers. They are also reinvesting the funds received from maturity of short-term papers.

Rates on three-month CPs issued by non-banking finance companies were quoted at 7.25-7.55%, and rates on papers of manufacturing companies were quoted at 7.10-7.30%.

Rates on three-month CDs were quoted at 6.95-7.20.

--Primary market

* NABARD and Aditya Birla Finance raised funds through CPs.

--Secondary market

* Indian Bank's CD maturing on Apr 5 was dealt four times at a weighted average yield of 7.1301%

* NABARD's CP maturing on Apr 3 was dealt two times at a weighted average yield of 7.0751%

At 1630 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:

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

End

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

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. 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 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2023. All rights reserved.

Informist, Wednesday, Jan 11, 2023

By Vishal Sangani

MUMBAI – A large issuance by National Bank for Agriculture and Rural Development led to a spike in funds raised through commercial papers today.

Financial institutions tapped the market to meet their funding requirements, dealers said.

So far today, CPs issued aggregated 52.30 bln rupees, compared with 29.25 bln rupees on Tuesday. NABARD raised 50 bln rupees through papers maturing in June at 7.37%.

The supply of papers by big-ticket issuers was readily absorbed because of their low risk profile.

However, market participation was thin because of low requirement for funds and rollover of papers in the primary market, dealers said.

Only two companies issued commercial papers, compared with seven companies on Tuesday.

Union Bank of India was the lone issuer of certificates of deposit. The state-owned bank raised 40 bln rupees at 7.77% through papers maturing in one year. The lender tapped the market for its funding needs and to meet the strong growth in credit, dealers said.

On Tuesday, Axis Bank was the only issuer of CDs. It raised 12.00 bln rupees.

Most banks were on the sidelines as there is no immediate need for funds and in view of the prevailing surplus liquidity in the banking system, dealers said.

Liquidity in the banking system is currently estimated to be in a surplus of 807.76 bln rupees, up from 736.32 bln rupees on Tuesday.

Despite surge in supply, rates on short-term debt instruments were in a narrow range due to steady demand from mutual funds, dealers said.

There is a steady inflow in liquid funds of mutual funds, which they are deploying in such papers. They are also reinvesting the funds received from maturity of short-term papers.

Rates on three-month CPs issued by non-banking finance companies were quoted at 7.25-7.55%, and rates on papers of manufacturing companies were quoted at 7.10-7.30%.

Rates on three-month CDs were quoted at 6.95-7.20.

--Primary market

* NABARD and Aditya Birla Finance raised funds through CPs.

--Secondary market

* Indian Bank's CD maturing on Apr 5 was dealt four times at a weighted average yield of 7.1301%

* NABARD's CP maturing on Apr 3 was dealt two times at a weighted average yield of 7.0751%

At 1630 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:

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

End

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

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. 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 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2023. All rights reserved.