Investment limits for govt bonds receives weak FPI response

Signalling a weak demand for government bonds among FPIs, an auction of investment limits for debt securities today received bids worth Rs 20,712 crore against Rs 26,002 crore bonds put on offer.

Investment limits for government bonds totalling Rs 5,290 crore did not find any taker, according to the National Stock Exchange (NSE) data.

The auction was conducted on NSE's e-bid platform from 1530 hrs to 1730 hrs after the close of market hours.

At the end of the two-hour auction, all the 67 bids worth Rs 20,712 crore were declared successful.

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

Till Friday, the total investment in the government debt category reached Rs 1,81,298 crore, which is 87.46 per cent of the total permitted threshold of Rs 2,07,300 crore.

Consequently, the exchange decided to conduct an auction for the allocation of unutilised debt limits.

To boost inflows of foreign funds into Indian capital markets, regulator Sebi has earlier this month decided to raise the investment limit for FPIs in central government securities in two tranches.

It has been decided to enhance limit for investment by FPIs in two tranches from April 12 and October 1.

Limit for FPIs in central government securities has been increased to Rs 2,07,300 crore on April 12 from Rs 1,89,700 crore. This limit will further be hiked to Rs 2,23,300 crore from October 1.