Foreign investors submit bids worth Rs 4,857 cr for govt bonds

Showing robust interest among foreign investors, an auction of government bonds today attracted bids worth Rs 4,857 crore -- alomst double the amount of such securities on offer at Rs 2,521 crore.
The auction was held for overseas investors at NSE's electronic platform for government debt securities, as per the information provided by the exchange.
This was the second such auction this month, after earlier bonds worth Rs 5,516 crore attracted bids totalling more than Rs 6,800 crore on July 1.
At the end of two-hour auction this evening, total bids received amounted to Rs 4,857 crore (USD 805 million).While the total number of bids stood at 17 of those were declared successful.

The successful bidders have been allocated investment limits for government debt securities worth the targeted amount of USD Rs 2,521 crore (USD 418 million.)
With this auction, the total investment cap of close to Rs 1 lakh crore in government debt securities by overseas investors have been reached. Any further investment in this category can take place only after unwinding of positions by the existing investors.

The auction was held as per Sebi regulations, which require that investment limits can be allocated through auction only of the existing investors cross 90 per cent of the overall limit.
Their total investment in government debt has reached Rs 97,025 crore on July 17, which is 97.47 per cent of the total permitted limit of Rs 99,546 crore.

Consequently, it was decided to conduct an auction for allocation of unutilised investment limits.
In the last month's auction conducted by the NSE, sale of government securities had attracted bids worth Rs 9,361 crore as against Rs 7,152 crore offered.
To boost foreign fund inflows into the capital markets here, regulator Sebi in September last year allowed overseas entities to invest in government securities without any auction till such investments reach 90 per cent of permitted limits.
Once this limit is reached, the auction mechanism now get triggered for allocation of the remaining limits.
Foreign investors have invested a net amount of over Rs 74,000 crore in debt market so far in 2014. Equity market has also seen similar trends with overseas fund inflow of over Rs 70,000 crore since the beginning of the year.