BSE to auction government bonds worth Rs 1,488 crore on Monday
Foreign investors have put in over Rs 1.37 lakh crore in the debt market
New Delhi: Leading stock exchange BSE will auction government debt securities worth Rs 1,488 crore for overseas investors on Monday. The auction would be conducted for overseas investors at 'ebidxchange' for government debt securities, as per information provided by the bourse.
In a circular issued today BSE said, "Live bidding session for allocation of debt investment limits for FII (Foreign Institutional Investors) and sub accounts shall be conducted on Monday, November 10, 2014 on exchange's 'ebidxchange' platform." A mock bidding session would be conducted today to check the system performance. The debt auction quotas give overseas investors the right to invest in debt up to the limit purchased. In the auction conducted by National Stock Exchange (NSE) last month, overseas investors had put in bids to the tune of Rs 2,094 crore, oversubscribing a Rs 676 crore auction for debt securities by three times.
Foreign investors have put in over Rs 1.37 lakh crore (USD 22 billion) in the debt market so far in 2014. The equity market has also seen similar trends with overseas fund inflows of over Rs 86,000 crore (USD 14 billion) since the beginning of the year. According to market experts, overseas investors have been pumping money in the country's debt market primarily on account of government's reforms agenda and the RBI's pledge to tame inflation.
As per norms, foreign investors can purchase up to USD 25 billion in government debt without restrictions. Exchanges initiate the auction mechanism once overseas investor reach 90 per cent of that limit. The total overseas investments in government debt securities through auction route had touched Rs 1,23,786 crore as on October 17, which is which is 99.48 per cent of total permitted limit of Rs 1,24,432 crore.