The recent auction held by market regulator Sebi for selling investment limits in government bonds to foreign institutional investors (FIIs) received strong response with 68 FIIs participating in it.
The 68 FIIs are learnt to have submitted bids worth Rs 10,146 crore for investment in government bonds. But the amount of investment limit auctioned by Sebi is Rs 5,533 crore and consequently, the number of successful bid stood at 26.
FIIs have shown strong interest in the sovereign bond market despite the warning by rating agency Standard & Poor’s (S&P). The agency warned that it may downgrade India’s sovereign rating to junk grade if the government fails to pursue reforms and check deterioration in fiscal and current account deficit in next 12-month.
Sebi conducts auction as per the available investment limits to FIIs and securing this limit allows the latter to invest in the bond market. Sebi auction debt limits for FIIs is conducted on the 20th of every month.
In April 2013, the government had relaxed ownership limits in Indian debt for FIIs. Last month, Sebi had conducted an auction for grant of permission to FIIs for investments worth up to Rs 29,108 crore in government bonds.
Official data indicate that FIIs infused Rs 28,148 crore since the beginning of 2013, after putting in Rs 34,988 crore in the debt securities last year.
Leave a Reply
You must be logged in to post a comment.