Foreign investors submit bids worth Rs 3,640 cr for govt bonds

Showing robust interest among foreign investors, an auction of government bonds today attracted bids worth Rs 3,640 crore, higher than the amount of such securities on offer at Rs 3,208 crore.

The auction was held for overseas investors at BSE's ebidxchange for government debt securities, as per the information provided by the bourse.

This would be the first auction after Sebi tweaked the investment limits for overseas investors in government securities by increasing the threshold for general investors from $20 billion to $25 billion.

At the end of two-hour auction this evening, total bids received amounted to Rs 3,640 crore. The total number of bids stood at 18 of those were declared successful.

The successful bidders have been allocated investment limits for government debt securities worth the targeted amount of Rs 3,208 crore.

Notably, on Wednesday, foreign investors have pumped in a a record high amount of Rs 16,072 crore ($2.65 billion) in the debt market.

The total overseas investments in government debt securities (through auction route) has already reached Rs 1,21,224 crore.

Foreign investors have been asked by exchanges not to take any fresh investment position in the interest rate futures (IRF) market as the foreign investors' exposure to government debt reached 97.2 per cent of permitted limit of $25 billion (Rs 1,24,432 crore).

Overseas investors are advised not to increase their long position in IRF till the time the overall long position of such investors in cash and IRF comes below 85 per cent of existing permissible limit.

Last month, Sebi had tweaked the investment limits for foreign investors in government securities by increasing the threshold for general investors from $20 billion to $25 billion.

At the same time, the sub-limit for longer time overseas investors such as sovereign funds has been reduced by $5 billion as there was less demand in this category. The overall cap remains unchanged at $30 billion.

The previous cap of $10 billion had been utilised by only about 20 per cent in this category. The $20 billion limit for general FPIs has been always fully exhausted.