Essel Propack, a part of the Essel Group, is a specialty packaging manufacturer of laminated plastic tubes for the FMCG and Pharma space. Yesterday, the company redeemed Commercial papers with maturity date of 13 March 2019, amounting to Rs.50 crore.
And today, it will be redeeming commercial papers with maturity date of 14 March 2019 amounting to Rs.35 crore.
Whenever a company redeems CPs on or before maturity, it sends the message across that there is no liquidity crunch and that is what the market is happy about today. The stock price rose 9% to Rs.119 and remains firmly in the green. Its 52-week high is at Rs.144.53.
Commercial paper is a short-term debt security issued by financial companies and large corporations. Companies sell commercial paper when they need a short-term loan to pay for such things as accounts payable and inventories. The security is generally sold at a discount, and redeemed at full value. The gain is the interest payment. Most commercial paper matures in one to six months, but some mature in up to nine months.