FIIs invest $2.5 bn in debt mkt this yr, $1 bn in March alone

Analysts attribute inflows to easing of investment norms for FIIs buying govt, corporate bonds

Overseas investors have pumped in $2.5 billion into Indian debt market so far this year, out of which over $1 billion has been invested in March alone.

Market analysts attributed the inflows into the debt market to the easing of investment norms for Foreign Institutional Investors buying government and corporate bonds.

FIIs infused a net amount of $1.2 billion (Rs 6,532 crore) during March taking the total for 2013 so far to $2.49 billion (Rs 13,480 crore) for Indian bond market, as per data available with market regulator Securities and Exchange Board of India.

FIIs had pumped in $743 million (Rs 4,000 crore) in February and $551 million (Rs 2,947 crore) in January.

From March 1-26, FIIs were gross buyers of debt worth Rs 24,089 crore. They sold bonds worth Rs 17,557 crore, translating into a net investment of Rs 6,532 crore ($1.2 billion).

FIIs have also invested $1.5 billion (Rs 8,557 crore) in the stock market in March, taking their overall investment to $10.2 billion (Rs 55,055 crore) so far this year. They had pumped in $4.57 billion in February and $4.05 billion in January.

Last week, Finance Minister P Chidambaram announced that the government would remove all restrictions and sub-limits within the two broad categories - government securities and corporate bonds - from April 1.

It will keep the ceiling of $25 billion for government securities and $51 billion for bonds issues by companies.

FIIs had pumped in around $6.64 billion (nearly 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 weak rupee.

As on March 25, the number of registered FIIs in the country stood at 1,760 and total number of sub-accounts was 6,331.