Finance Street Sees Raft Of Cp Floats

The commercial paper (CP) wave continues to hit the money market. Today, at least five CP issues were placed by four corporate entities raising over Rs 200 crore.

The rates vary between 6.10 per cent and 6.25 per cent, well below the below the Reserve Bank of India's benchmark bank rate of 6.5 per cent.

The Reuters reference rate for Indian three-month CP issued by manufacturing companies was 6.14 percent on Monday compared to the previous 6.15 per cent.

Cement and construction major Larsen & Toubro Ltd (L&T) placed a 180-day CP for Rs 20 crore at 6.35 per cent and a 90-day CP for Rs 10 crore at 6.10 per cent.

The first paper was placed with a mutual fund while the second one was placed with a state-run bank.

The 180-day period begins on August 30 while the 90-day period begins on September 1. Last week, L&T had raised Rs 15 crore through 90-day commercial paper at 6.15 per cent.

Consumer products and herbal medicine maker Dabur India Ltd raised 90-day commercial paper for Rs 10 crore at 6.12 per cent, 38 basis points below the bank rate.

Dabur India placed the 90-day paper with a private sector mutual fund, money market dealers said. The 90-day period begins on September 2.

Electrosteel Castings, too, a placed a 90-day commercial paper for Rs 10 crore at 6.25 per cent with mutual funds, money market dealers said.

The largest commercial paper was issued by the state-run Indian Oil Corporation (IOC), the country's largest oil company. It placed a 90-day commercial paper for Rs 155 crore at 6.14 per cent -- two basis points higher than Dabur India CP rate -- with three banks. The 90-day period begins on August 29.

All these papers were rated 'P1+', denoting highest safety, by the Credit Rating Information Services of India Ltd (Crisil).

Among ongoing issues, the Industrial Development Bank of India has floated a CP for Rs 5 crore.