Signalling robust demand for government bonds, an auction of debt securities attracted bids of Rs 1,487 crore, over two times of Rs 654-crore put on offer, from overseas investors.
The auction was held today at BSE’s ebidXchange platform for allocation of Foreign Institutional Investors (FIIs) investment limits in government debt securities worth Rs 654 crore.
At the end of two-hour auction this evening, 18 bids were declared successful.
The debt auction quota gives overseas investors the right to invest in debt, up to the limit purchased.
According to information available with the depositories, total investments, including limits acquired by foreign investors through auction route, stood at Rs 1,21,748 crore till May 14, which is 97.84 of total permitted investment limit of Rs 1,24,432 crore in government debt securities.
Consequently, the exchange had conducted an auction for the allocation of unutilised debt limits.
The earlier auctions for government debt securities have always been over-subscribed multiple times, given the huge interest among foreign investors for these bonds.
The demand for corporate debt securities among foreign investors is less as compared to government bonds.
Last month, National Stock Exchange (NSE) had conducted an auction for government bonds worth Rs 2,684 crore, which attracted bids worth Rs 6,657 crore.
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 an investment of up to USD 5 billion (Rs 29,137 crore) is permitted ‘on tap’.
“The minimum bid is Rs 1 crore and the time period for utilisation of the limits is 15 days from the date of allocation. Upon sale/redemption of debt securities, the FII or QFI will have a reinvestment period of 5 days,” BSE said.
“If the reinvestment is not made within five working days, then the limits shall come back to the pool of free limits,” it added.