Govt bonds oversubscribed, FIIs put in bids worth Rs 1,566 crore

New Delhi: Government bonds Monday attracted bids of Rs 1,566 crore from foreign investors against Rs 661 crore worth of securities put on offer.

The auction was held at National Stock Exchange's e-bid platform for allocation of foreign institutional investors' investment limits in government debt securities worth Rs 661 crore.

At the end of two-hour auction this evening, 19 bids were declared successful, as per the informational available with NSE.

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 1,23,784 crore till September 16, which is 99.45 percent of the total permitted investment limit of Rs 1,24,432 crore in government debt securities.

Consequently, exchange had decided to conduct an auction for the allocation of unutilised debt limits.

A mock bidding session was conducted on Friday to check the system performance.

In earlier auctions too, government bonds were subscribed multiple times, given the huge interest among foreign investors, while the demand for corporate bonds remained weak.

Last month, BSE had conducted an auction for government bonds worth Rs 561 crore, which attracted bids worth Rs 987 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 is in talks with the government to reset FII limit in government bonds in rupee terms.