Mumbai: Showing strong demand for government bonds, foreign investors Monday put in bids of Rs 7,224 crore for debt securities of worth Rs 3,041 crore placed under the auction.
The auction was held at NSE's 'e-bid' platform for allocation of investment limits in government debt securities worth Rs 3,041 crore (USD 490 million). The auction attracted bids for Rs 7,224 crore (USD 1.16 billion).
At the end of two-hour auction this evening, as many as 73 bids were made, of which 36 were declared successful.
The debt auction quotas give overseas investors the right to invest in debt up to the limit purchased.
The aggregate overseas investment in these securities has reached Rs 1,21,271 crore ? 97.46 percent of the total permitted limit of Rs 1,24,432 crore ? as on November 28.
According to the guidelines of capital markets regulator Sebi, unutilised debt investment limits for foreign investors need to be auctioned on an exchange platform when the aggregate reaches or breaches 90 percent of the limit.
The aggregate limit includes that of Foreign Institutional Investors, Foreign Portfolio Investors and Qualified Institutional Investors.
The last such auction was conducted on November 10, when debt securities worth Rs 1,488 crore were over-subscribed by nearly four times, receiving bids worth Rs 5,664 crore.
Almost all such auctions have received a robust response in the recent times and have been over-subscribed by multiple times, reflecting a huge demand among foreign investors for government debt securities in the Indian markets.
According to the current norms, foreign investors are allowed to invest up to USD 25 billion (Rs 1,24,432 crore) in government debt securities through the auction route, while the cap currently stands at USD 5 billion (Rs 29,137 crore) for government debt bonds through the 'on tap' route.
While the limit in the first category has been exhausted by over 97 percent, the second category has also been used up by nearly 84 percent.
Foreign investors are allowed to pump in a further USD 5.5 billion in treasury bills, of which nearly 14 percent is used as of now.
In corporate debt, the upper cap currently stands at USD 51 billion and nearly 57 percent of this limit has been exhausted by the foreign investors.
The overall investment cap for debt securities stands at USD 81 billion (Rs 3,97,892 crore), which also includes USD 2 billion for commercial papers and USD 5 billion for credit enhanced bonds.
Of this overall limit, the total investments and limits acquired by foreign investors currently stands at Rs 2,83,984 crore, which is over 71 percent of the permitted limit.
