FIIs invest Rs 35k crore in debt market in 2012
Overseas investors have pumped in around Rs 35,000 crore in the Indian debt market in 2012, highest in two years, largely on account of increased investment limits in bonds and the weak rupee.
Foreign Institutional Investors (FIIs) were gross buyers of debt worth Rs 2,06,847 crore, while they sold bonds amounting to Rs 1,71,859 crore - a net inflow of Rs 34,988 crore (USD 6.64 billion), as per the data provided by market regulator Sebi. This was the highest net investment by FIIs in debt securities since 2010, when they had infused Rs 46,408 crore.
The huge inflows came despite the number of registered FIIs in India dipping to 1,759, from 1,767 at the end of 2011.
Market experts attributed the huge inflows into debt market to the increase in the ceiling on both corporate and government bonds, coupled with weakness in rupee against the US dollar.
"The steps taken by Sebi are positive for FIIs which have helped in reviving FII sentiment towards the debt market," Geojit BNP Paribas Research Head Alex Mathew said.
"Indian currency which is hovering around the 55-level has also helped FIIs to stay invested in the domestic market," CNI Research Head Kishor Ostwal said.
Since the opening up of Indian markets for FIIs in 1992, they have made a cumulative net investment of Rs 1.56 lakh crore (USD 33 billion) in the debt segment.
The government has increased FII limits in government securities and corporate bonds by USD 5 billion
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