Govt bonds over-subscribed; FPIs put in bids worth Rs 1,678-cr

Signalling robust demand for government bonds, an auction of debt securities today received bids worth Rs 1,678 crore -- almost double of the securities put on offer -- from foreign investors.
The auction was held at NSE's ebid platform for allocation of Foreign Portfolio Investors (FPIs) investment limits in government debt securities worth Rs 852 crore (USD 131 million), that attracted bids of Rs 1,678 crore (USD 257 million).
At the end of two-hour auction this evening, 27 bids were declared successful, as per the information available with the National Stock Exchange (NSE).
The debt auction quota gives overseas investors the right to invest in the debt up to the limit purchased.

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.
Last month, an auction for government bonds worth Rs 5,600 crore had attracted bids to the tune of Rs 17,266 crore. It included the increased investment cap announced by markets regulator Sebi.

Depository data showed that total investments, including limits acquired by foreign investors through the auction route, stood at Rs 1,29,048 crore till October 29, which is 99.34 per cent of the total permitted investment limit of Rs 1,29,900 crore in government debt securities.

The Securities and Exchange Board of India (Sebi) has decided to enhance the limit for investment by FPIs in government securities in two tranches from October 12, 2015 and January 1, 2016.
The limit for overseas investors in securities has been hiked to Rs 1,29,900 crore on October 12 and would be further shored up to Rs 1,35,400 crore from January 1, 2016.
Earlier, they were allowed to invest up to Rs 1,24,432 crore in government debt securities through auction.