NSE to auction investment limit for Rs 2,684-cr bonds tomorrow

The National Stock Exchange will auction tomorrow investment limits for foreign investors to buy government debt securities worth Rs 2,684 crore.

This is the highest investment limit on offer for overseas investors in more than half-a-dozen auctions conducted since December.

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.

The auction for debt securities worth Rs 2,684 crore would take place on NSE's e-bid platform from 1530 hrs to 1730 hrs, after close of normal market hours, on May 18.

A mock bidding session was conducted on Friday to check the system performance.

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, exchange shall conduct an auction for the allocation of unutilised debt limits on May 18, 2015," NSE said in a circular.

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 auction route, while an investment of up to USD 5 billion (Rs 29,137 crore) is permitted 'on tap'.