September sees robust surge in CP and CD issuances driven by festive demand

Mumbai: India's short-term debt markets witnessed heightened activity in September as corporates and banks ramped up fundraising to meet festive-season liquidity demand, a rating agency said.

While corporate demand for commercial papers (CPs) surged sharply, non-banking financial companies (NBFCs) maintained a measured stance, focusing on balance sheet strength and asset quality. corporate CP issuances climbed to ₹62,300 crore in September 2025, up from ₹44,000 crore in August, underscoring working capital demand fuelled by festive-season inventory stocking, India Ratings said.

"The relatively lower cost of CP borrowings compared to traditional bank loans also prompted corporates to increasingly tap this market for short-term funding," said the report by the credit evaluator.


By contrast, NBFC CP issuances moderated to ₹54,600 crore in September, down from ₹57,200 crore in August.

Market participants attributed the slight decline to a strategic recalibration among NBFCs, which are prioritising liquidity buffers and asset quality management over aggressive asset growth.

"NBFCs appear to be taking a more conservative approach this season, balancing the need for liquidity with a focus on maintaining credit discipline," India Ratings said in its report.

With banking system liquidity tightening amid tax outflows and festive spending pressures, banks turned aggressively to the certificate of deposit (CD) market to meet short-term funding needs.

State Lenders
Public sector banks (PSBs) led the issuance spree, raising a staggering ₹1.04 lakh crore in September, nearly double the ₹51,700 crore garnered in August. Private sector banks made ₹41,200 crore worth of issuances, nearly trebling from ₹16,500 crore the previous month.