Govt bonds over-subscribed; FIIs put in bids worth Rs 6,657 cr

Signalling robust demand for government bonds, an auction of debt securities worth Rs 2,684 crore attracted bids that were more than twice the amount from overseas investors.
The auction was held today at National Stock Exchange's e-bid platform for allocation of Foreign Institutional Investors (FIIs) investment limits in government debt securities worth Rs 2,684 crore saw bids for Rs 6,657 crore, as per the bourse.
This was the highest investment limit on offer for overseas investors in more than half-a-dozen auction conducted since December, it said.
On December 1, exchanges had auctioned investment limits worth Rs 3,041 crore for government debt securities. The debt auction quota gives overseas investors the right to invest in the debt up to the limit purchased.

At the end of two-hour auction this evening, as many as 55 bids were made in the auction, of which 30 were declared successful.
According to information available with the depositories, total investments, including limits acquired by foreign investors through auction route, stood at Rs 1,21,748 crore till May 14, which is 97.84 of total permitted investment limit of Rs 1,24,432 crore in government debt securities.

Consequently, the exchange had conducted an auction for the allocation of unutilised debt limits.
The earlier auctions for government debt securities have always been over-subscribed multiple times, given the huge interest among foreign investors for these bonds.

The demand for corporate debt securities among foreign investors is less as compared to government bonds.
Foreign investors are allowed to invest up to USD 25 billion (Rs 1,24,432 crore) in government debt securities through the auction route, while an investment of up to USD 5 billion (Rs 29,137 crore) is permitted 'on tap'.