As the enhanced limits were to be allotted on a first-come-first-serve basis, the FIIs started applying from the midnight of June 15 and the entire enhanced limit was exhausted within six to seven minutes. Some successful bidders include BNP Paribas, Lehman Brothers, JP Morgan Securities Asia Pvt Ltd while those on the wait list include ING Bank NV, Citigroup Global Markets (Mauritius), New Vernon India and ABN Amro Asia Pacific PTD.
A Balasubramaniam, CIO, Birla Sunlife Mutual Fund, said, This clearly shows there is an appetite for Indian G-Secs, which look attractive to FIIs. With yields on 10- and 20-year government papers going up and G-Sec prices falling, it is essentially a good opportunity for investors with a long-term horizon of one or two years.
TC Nair, wholetime member, Sebi, said, With the interest rates falling to historic low in the Western markets and the US in particular, this provides an arbitrage opportunity to these investors. These investors borrow funds at lower level in their home country. Deploying this in domestic market can earn up to 7-8% through G-Secs and corporate debt instruments. The domestic interest rates are expected to stay firm for a while, which will drive foreign investors to Indian debt market.