New Delhi: Sovereign wealth funds and other long term foreign portfolio investors (FPIs) can buy up to Rs9,500 crore worth corporate debt in infrastructure sector, markets regulator Sebi on Friday said.
This comes after RBI’s decision to exclude foreign investment in rupee denominated bonds, popularly known as masala bonds, from the combined corporate debt Limit (CCDL). This sub-limit for long-term FPIs for infrastructure sector would be Rs9,500 crore from 3 October and would be further enhanced to Rs19,000 crore on 1 January, Sebi said in a circular.
The new limit will be within the overall corporate debt investment limits (CDIL), the Securities and Exchange Board of India (Sebi) said. Sovereign wealth funds, multilateral agencies, insurance funds, pension funds and foreign central banks are long term FPIs.
The markets regulator said foreign investments in rupee denominated bonds would no longer be reckoned against the combined corporate debt limit from 3 October. Further, the CCDL would be renamed as the corporate debt investment limits for FPIs and the upper limit for corporate debt would be stated only in rupee terms.
Till 22 September, foreign investments in rupee denominated bonds were Rs32,381 crore, while the undrawn amount against such bonds was Rs11,620 crore. Thus, a total of Rs44,001 crore has been reckoned against rupee denominated bonds within the combined corporate debt limit of Rs2,44,323 crore, which would be carved out of erstwhile CCDL and will be added to the new limit of CDIL.