Informist, Monday, Jul 4, 2022

By Vishal Sangani

MUMBAI – Large issuances by L&T Finance Ltd and Indian Oil Corp led to a spike in funds raised through commercial papers today.

Some companies also tapped the market to roll over papers set to mature in the coming days to meet their funding requirements, dealers said.

So far today, CPs aggregating 77.50 bln rupees were issued. L&T Finance raised 35.00 bln rupees through papers maturing on Jul 28 at 5.08% and Indian Oil Corp raised 27.50 bln rupees overall through CPs maturing on Aug 22 and Aug 26.

Papers floated by big-ticket issuers were readily absorbed owing to their low-risk profile.

On Friday, Hindustan Petroleum Corp was the lone issuer, raising 5 bln rupees through CPs.

Despite the surge in issuances, rates on short-term debt were unchanged because of steady demand from mutual funds and the prevailing surplus liquidity in the banking system, 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 commercial papers of non-bank finance companies were quoted at 5.55-5.80%, while those on papers of manufacturing companies were quoted at 5.35-5.65%.

Rates on three-month certificates of deposit were quoted at 5.20-5.45%.

Liquidity in the banking system is currently estimated to be in a surplus of over 3.26 trln rupees as against 2.89 trln rupees on Friday. The surplus has widened on account of the government's month-end spending in the form of salaries and pension payouts. 

Banks did not issue any certificates of deposit today as there is no immediate need for funds owing to surplus liquidity in the banking system.

On Friday, HDFC Bank was only issuer, raising 20.00 bln rupees through CDs.

--Primary market

* Poonawalla Fincorp, Indian Oil Corp, L&T Finance, Hindustan Petroleum Corp and ICICI Securities raised funds through CPs.

--Secondary market

* National Bank for Agriculture and Rural Development's CD maturing on Feb 17 was dealt at a weighted average yield of 6.0701%

* Reliance Retail Ventures' CP maturing on Aug 30 was dealt twice at a weighted average yield of 5.1898%

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:

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 Avishek Dutta

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