Aiming at creating greater interest among foreign investors, the Finance Ministry has decided to halve the lock-in period for foreign portfolio investments in infrastructure boÂnds to on-and-a-half years. Reducing the lock-in period will allow the sale and listing of these bonds, thereby deepening the debt market. The chaÂnges would be announced soon by Securities and Exchange Board of India (SEBI). The govÂernment has been considering this for some time, while reporting the poor demand for such bonds in the first three months of this fiscal year.
Foreign investors have so far put in only $80 million in infrastructure bonds, against the target of $25 billion. The Finance Ministry's efforts to attract FIIs to invest in infrastrÂucture bonds have not had an encouraging response from the overseas investors, despite a rise in the cap. During the lock-in period, FIIs cannot sell but trade among themselves in such bonds.