BackGovt bonds oversubscribed; FPIs put in bids worth Rs1,678 crore
The securities, worth `852 crore, attracted bids of `1,678 crore, and at the end of the auction, 27 bids were declared successful
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New Delhi: Signalling robust demand for government bonds, an auction of debt securities today received bids worth ₹ 1,678 crore, almost double of the securities put on offer, from foreign investors.
The auction was held at the National Stock Exchange’s (NSE) ebid platform for the allocation of Foreign Portfolio Investors (FPIs) investment limits in government debt securities. The securities, worth ₹ 852 crore ($131 million), attracted bids of ₹ 1,678 crore ($257 million).
At the end of the two-hour auction this evening, 27 bids were declared successful, as per the information available with the NSE. The debt auction quota gives overseas investors the right to invest in the debt up to the limit purchased.
During earlier auctions, government bonds have always been subscribed multiple times, given the huge interest among foreign investors, while the demand for corporate bonds remains less. Last month, an auction for government bonds worth ₹ 5,600 crore had attracted bids to the tune of ₹ 17,266 crore.
Depository data showed that total investments, including limits acquired by foreign investors through the auction route, stood at ₹ 1,29,048 crore till 29 October, which is 99.34% of the total permitted investment limit of ₹ 1,29,900 crore in government debt securities.
The Securities and Exchange Board of India (Sebi) has decided to enhance the limit for investment by FPIs in government securities in two branches from 12 October, 2015 and 1 January, 2016. The limit for overseas investors in securities has been hiked to ₹ 1,29,900 crore on 12 October and would be further shored up to ₹ 1,35,400 crore from 1 January, 2016.
Earlier, foreign investors were allowed to invest up to ₹ 1,24,432 crore in government debt securities through auction.
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