Commercial papers (CP) worth over Rs 1,000 crore are slated to hit the market in the next few months with interest rates dropping and subscribers willing to pick up the instrument without a stand-by facility.
Says Subodh Shah, executive director, Credit Rating Informa-tion Services of India Ltd (Crisil), The CP market is booming and we have already approved and reaffirmed CPs worth Rs 500 crore since the credit policy. Another Rs 500 crore is in the pipeline for approval.
Crisil yesterday approved the commercial paper ratings of Anagram Finance for Rs 25 crore, Gujarat Ambuja Cement for Rs 90 crore, Electrosteel Castings for Rs 20 crore and NRB bearings for Rs 4 crore.
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It also reaffirmed the ratings of BOC India for Rs 10 crore and Dabur India and Singer India for Rs 4 crore.
Says P M Thomas, managing director, Credit Analysis and Research (CARE), In the past six months there were few fresh CP issues, but now a few have begun to trickle in.
CARE has reaffirmed 10 ratings. Thomas points out that all these companies are blue chips and expects other companies to start tapping the market soon.
On April 15, 1996, the total outstanding commercial papers stood at Rs 705 crore. These three-month papers carried interest rates in the band of 11.3 per cent and 12.5 percent.
Now, the interest rates on these 90-day papers are in the range of 10.5 and 12 per cent depending on the profile of the company.
If one takes into account CARE-rated papers, the figure could be well over Rs 1,200 crore. This excludes the papers rated by ICRA and Duff & Phelps.