BSE to auction investment limit for Rs 654-cr bonds on June 8

Leading stock exchange BSE will auction investment limits for overseas investors tomorrow to purchase government debt securities worth Rs 654 crore.

The auction would be conducted on BSE's e-bidxchange platform from 1530 hrs to 1730 hrs after the close of normal market hours on June 8, as per the information available with the exchange.

The debt auction quota gives overseas investors the right to invest in debt, up to the limit purchased.

Depository data showed that total investments, including limits acquired by foreign investors through the auction route, stood at Rs 1,21,748 crore till May 14, which is 97.84% of the total permitted investment limit of Rs 1,24,432 crore in government debt securities.

"BSE (formerly known as Bombay Stock Exchange) will auction investment limits worth Rs 654 crore for overseas investors on Monday i.E. June 8, 2015," the exchange said.

During earlier auctions, government bonds have always been subscribed multiple times, given the huge interest among foreign investors, while the demand for corporate bonds remains less.

Foreign investors are allowed to invest up to USD 25 billion (Rs 1,24,432 crore) in government debt securities through auction while an investment of up to USD 5 billion (Rs 29,137 crore) is permitted 'on tap'.

"The minimum bid is Rs 1 crore and the time period for utilisation of the limits is 15 days from the date of allocation. Upon sale/redemption of debt securities, the FII or QFI will have a reinvestment period of 5 days," BSE said.

"If the reinvestment is not made within 5 working days, then the limits shall come back to the pool of free limits."

Last month, National Stock Exchange (NSE) had conducted an auction for government bonds worth Rs 2,684 crore, which attracted bids worth Rs 6,657 crore.