BSE to auction investment limits for Rs 5,500 crore government bonds

New Delhi: Leading bourse BSE will on Monday auction investment limits for foreign investors to buy government debt securities worth an estimated Rs 5,500 crore. This would include the increased investment cap announced by markets regulator SEBI earlier this week.

The auction will be conducted on BSE's ebidxchange from 1530 hours to 1730 hours, after the close of stock market hours on Monday, October 12, the exchange said in a circular. The free limit as on October 9, along with the new debt limits of Rs 5,468 crore would be auctioned on the exchange platform, it added.

The debt auction quota gives overseas investors the right to invest in the debt up to the limit purchased. A mock bidding session will be conducted on October 9, to check the system performance.

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 661 crore had attracted bids to the tune of Rs 1,561 crore.

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 would be hiked to Rs 1,29,900 crore and Rs 1,35,400 crore on October 12, this year and January 1, 2016 respectively. Currently, they are allowed to invest up to Rs 1,24,432 crore in government debt securities through auction.