Govt bonds over-subscribed; FIIs put in bids worth Rs 751-cr

Government bonds Monday attracted bids of Rs 751 crore from foreign investors against Rs 403 crore worth of securities put on offer.

New Delhi: Government bonds Monday attracted bids of Rs 751 crore from foreign investors against Rs 403 crore worth of securities put on offer.

The auction was held today at BSE's ebidXchange platform for allocation of FII investment limits in government debt securities worth Rs 403 crore.

At the end of two-hour auction this evening, 18 bids were declared successful.

The debt auction quota gives overseas investors the right to invest in debt, up to the limit purchased.
The auction in foreign institutional investment (FII) limit in government debt comes as 90 percent of the overall limit has been used up by foreign investors.

Earlier auctions of government debt securities had also been over-subscribed multiple times, given the huge interest among foreign investors for these bonds. However, the demand for corporate debt securities among foreign investors is lower compared to government bonds.

Last month, the National Stock Exchange (NSE) had conducted an auction for government bonds worth Rs 2,451 crore, which attracted bids worth Rs 4,986 crore.

Foreign investors are allowed to invest up to USD 25 billion (Rs 1,24,432 crore) in government debt securities through the auction route, 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.

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