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Commercial Paper 


 
A Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. With a view to enable highly rated corporate borrowers to diversify their sources of short-term borrowing and also provide an additional instrument to investors, RBI introduced Commercial Papers as a money market instrument in the Indian financial market in 1990.
 
Corporates and primary dealers (PDs), and all-India financial institutions (FIs) that have been permitted to raise short-term resources by Reserve Bank of India are eligible to issue CP. A corporate would be eligible to issue CP provided subject to certain conditions. All eligible issuers are required to obtain a credit rating for issuance of Commercial Paper from a credit rating agency as may be specified by the Reserve Bank of India from time to time.
 
CPs are issued at a discount to face value, as may be determined mutually by the issuer & investor. They can be issued for maturities between a minimum of 7 days and a maximum up to one year from the date of issue and can be issued in denominations of Rs.5 lakh or multiples thereof. Issuers may buyback the CP, issued by them to the investors, before maturity but not before 30 days from the date of issue.
 
CP may be issued to and held by individuals, banking companies, other corporate bodies registered or incorporated in India and unincorporated bodies and Non-Resident Indians (NRIs). Generally, mutual funds, banks, insurance companies, etc are the dominant investors in the CP market.
 
Secondary market trading takes place through the interbank broking market between institutional participants. OTC trades in CP shall be settled through NSCCL, ICCL and MSEI CCL. The settlement cycle for OTC trades in CP shall either be T+0 or T+1.
 
Clients interested buying/selling CPs may contact our Sales Personnel on 022-66202224/25/28.
 
 
 

Latest News

Consumer Price Index (Combined)
• Consumer Price Index (Combined) inflation for October 2022 printed at 6.8%, as compared to 7.4% in the previous month.
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Headline WPI inflation for
• Headline WPI inflation for October 2022 printed at 8.4%, lower than 10.7% in September 2022.
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IIP growth for September
• IIP growth for September 2022 printed at 3.1%, higher than the revised reading of 0.7% in August 2022, on a year-on-year basis.
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In the fifth Monetary
In the fifth Monetary Policy for FY23, the MPC decided to hike the policy Repo rate by 50 basis points with a 5-1 vote count. Consequently, key policy rates stand as follows: Repo rate at 5.90%, Standing Deposit Facility rate at 5.65%, and Marginal Standing Facility and Bank rate at 6.15%.
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Real gross domestic
Real gross domestic product for Q1FY23 noted a growth of 13.5% on a year-on-year basis, aided by a pickup in activity across segments. Further, GDP contracted by 9.6% on a quarter- on-quarter basis and grew by 3.8% from Q1FY20 levels.
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