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Early signs of recovery in the commercial paper market


From the sale of Commercial Paper (CP), initial indicators of this market’s revival are getting. The number of companies that have sold CPs is increasing. 

Early signs of recovery in the commercial paper market
Early signs of recovery in the commercial paper market

The Daily Primary CP volume rose to Rs 12,060 crore on Wednesday. This information has been received by the Clearing Corporation of India data.

These figures are issued based on the settlement date. Dealers said that this is the highest CP volume in the last one month.

Regarding this, Siddhartha Chaudhary, Senior Fund Manager, Fixed Income, in Sundaram Mutual Fund said, “The signs of revival are showing in the commercial paper market. Now there are great ratings and big companies coming in.

‘ He also said that top-rated companies are mobilizing funds at a reasonable rate. Now it does not seem to have much spread like before.

Chaudhary said that by the time the commercial paper market will take time to become completely normal. Chaudhary said that this market has to face the crisis at a time when the system is losing its cash. For the seasonal and other reasons, the cash is still decreasing in the system.

National Bank for Agriculture and Rural Development (NABARD) Rs 4,575 crore while Housing Development Finance Corporation raised Rs 2,000 crore.

 LIC Housing Finance has also sold commercial paper worth Rs. 1,000 crores. These commercial papers will be macho in two, three and six months. About HDFC’s commercial paper, a top government mutual fund house selling a secondary market is believed to have bought them from the primary market.

Experts say that much depends on how the bank reinstates the funding, which till now has been providing mutual funds. About this, Lakshmi Iyer, Chief Head of Product Head and Debt, Kotak Mahindra Asset Management, said, “The market has been stirred by selling commercial paper of big companies.”

He said that due to uncertainty a few weeks ago, the market had completely stalled. Iyer said that rates in the commercial paper market have become quite stable. However, it will take some time to fully normalize the situation.

 He said that the authorities should take measures to increase the cash and take measures. The total volume in the secondary market stood at Rs 7,148 crore, which is more than the earlier average daily volume.


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