Aditya Birla Finance becomes first company to list commercial papers on stock exchanges

Aditya Birla Finance Ltd (ABFL), the Non-Banking Financial Company (NBFC) arm of Aditya Birla Capital, has now become the first company to list its commercial papers (CPs) on stock exchanges. The move comes after stock exchanges- the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange), came out with a framework for listing of commercial papers (CPs), in a bid to broaden investors’ participation in such securities.

Key Highlights

Aditya Birla Finance is first company to list its commercial paper with value date of 28 November 2019 and maturity date on 7 February 2020. ABFL is a well-diversified NBFC with a long-term credit rating of AAA (stable) from both ICRA as well as India Ratings.

Listing of commercial papers is expected to lead to an efficient transmission of information regarding corporate borrowings and liquidity positions to market participants. It will also contribute effectively towards development of CP market and is expected to have a positive effect on debt capital market.

What is a Commercial paper?

It is an unsecured money market instrument which is issued in form of promissory notes that enables highly rated corporate borrowers to diversify their sources of short-term borrowings. It also provides an additional instrument to investors. CPs can be issued for maturities between a minimum of 7 days and a max of up to 1 year from date of issue. They are usually issued at a discount from face value and reflects prevailing market interest rates.