What is the procedure to buy a new Commercial Paper (CP) issue???
The below link mentions some new Commercial Paper issuance on Nov 16th
If suppose I got a few lakhs of cash & wanted to buy Commercial paper of ‘BAJAJ FINANCE LIMITED’, How can I purchase this? Where can I see all the new CP offers for a particular day?
Commercial paper is usually sold to institutional investors. It isn’t really possible for retail investors. You can buy corporate bonds, though; a lot of them trade on the exchanges.
Check this
https://nseindia.com/live_market/dynaContent/live_watch/equities_stock_watch.htm?cat=SEC
Thanks for the reply. The problem with NSE listed bonds seems liquidity. Bcoz the highest traded bond has turnover of just 40 lacs. So getting buyers/sellers for a few lakhs will be a problem!!! Or am I missing anything???
Hello @nithin,
Is it still available exclusively for institutional investors? Or similarly to T-Bills, now retail investors can also participate in it?
These are issued on a seperate platform and it’s not possible to make it available to retail. The only way is if exchanges figure out a mechanism like they have for government securities.
Having said that, the better way to invest in these paoees, if at all you want to, is through liquid funds. They invest in commercial papers and other short term papers. If you don’t want any headache in life, T-bills are the best.
Thank you for the explanation @Bhuvan. According to you, which investment avenue is better and why? T-Bills or Liquid Funds?
T-bills are safe, and liquid funds are slightly risky. There’s no better or worse, it depends on what you’re using them for.
Thank you for clarity. Currently I am exploring debt funds, I have another question (link), could you please help me with that?
You could try contacting a primary dealer (a list is available on RBI website) and see if they will sell you some. A few months ago, I was considering buying CPs but after looking into it a little bit I decided it would not be very straightforward as compared, to say, applying for TBILLs (which are much easier nowadays with Zerodha/RBIretaildirect/.). In the end, I felt it’s too much hassle to procure something that has less than a year’s maturity. Makes so much more sense to put money in a short duartion/money market fund whose investment mandate is to buy CPs/CDs.