FIIs bid four-times more for Rs 1,488 cr govt bond auction

Foreign investors on Monday put in bids worth Rs 5,664 crore for government bonds, nearly four times more than debt securities of Rs 1,488 crore put on auction.

The auction was held at 'ebidxchange' platform for allocation of investment limits in government debt securities worth Rs 1,488 crore (US $242 million). The auction attracted bids for Rs 5,664 crore (US $920.67 million).

At the end of two-hour auction on Monday evening, as many as 83 bids were made in the auction, of which 28 were declared successful. The debt auction quotas give overseas investors the right to invest in debt up to the limit purchased.

In the October auction, the total demand was Rs 2,094 crore while the amount available for auction was Rs 646 crore.

Foreign investors have put in over Rs 1.37 lakh crore (US $22 billion) in the debt market so far in 2014. The domestic equity market has also seen similar trends with overseas fund inflows of over Rs 86,000 crore (US $14 billion) since the beginning of 2014.

Total overseas investments in government debt securities through auction route had touched Rs 1,23,786 crore as on October 17, which is 99.48 per cent of total permitted limit of Rs 1,24,432 crore.

As per norms, foreign investors can purchase up to US $25 billion in government debt without restrictions. Exchanges initiate the auction mechanism once overseas investor reach 90 per cent of that limit.