BSE to auction investment limits for Rs 561 crore government bonds

Mumbai: Leading bourse BSE will auction, on Monday, investment limits for foreign investors to buy government debt securities worth Rs 561 crore.  The auction will be conducted on BSE's ebidxchange  platform from 1530 hours to 1730 hours after close of normal  market hours on August 31, the exchange said in a circular. 

The debt auction quota gives overseas investors the right to invest in the debt up to the limit purchased. Depository data showed that total investments, including limits acquired by foreign investors through the auction route, stood at Rs 1,23,876 crore till August 6, which is 99.5 per cent of the total permitted investment limit of Rs  1,24,432 crore in government debt securities. 

Consequently, exchange would conduct an auction for the allocation of unutilised debt limits on August 31. A mock bidding session would be conducted today to check  the system performance, BSE (formerly known as Bomabay Stock  Exchange) said.  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.  Earlier this month, National Stock Exchange (NSE) conducted an auction for government bonds worth Rs 556 crore, which attracted bids worth Rs 974 crore. 

Foreign investors are allowed to invest up to USD 25 billion (Rs 1,24,432 crore) in government debt securities  through auction while an investment of up to USD 5 billion (Rs 29,137 crore) is permitted 'on tap'.  Further, the Reserve Bank of India (RBI) is in talks with  the government to reset FII limit in government bonds in rupee terms.