NSE to auction FII limits for govt debt worth Rs 3,161 cr

As foreign investors remain bullish on Indian markets, leading bourse NSE will auction on Monday investment limits for overseas institutional investors in government debt securities worth Rs 3,161 crore (Rs 31.61 billion).

The auction follows aggregate overseas investments in government debt securities yesterday reaching Rs 1,21,271 crore (Rs 1,212.71 billion), which is 97.46 per cent of total permitted limit of Rs 1,24,432 crore (Rs 1,244.32 billion).

As per capital markets regulator Security and Exchange Board of India's guidelines, the unutilised debt investment limits for foreign institutional investors need to be auctioned on an exchange platform when the aggregate investments of all overseas investors reach or breach 90 per cent of the investment limit.

These include FIIs, Foreign Portfolio Investors and Qualified Institutional Investors.

Accordingly, live bidding for auction of the currently unutilised debt investment limits worth Rs 3,161 crore (Rs 31.61 billion) would be conducted on NSE's e-Bid platform on December 1.

The last such auction was conducted on BSE's EbidXchange platform on November 10, when debt securities worth Rs 1,488 crore (Rs 14.88 billion) was over-subscribed by nearly four times and received bids worth Rs 5,664 crore (Rs 56.64 billion).

A total of 83 bids were received, out of which 28 were declared successful on that day.

Almost all such auctions have received robust response in the recent times and have got over-subscribed by multiple times, reflecting a huge demand among foreign investors for government debt securities in the Indian markets.

As per the current norms, foreign investors are allowed to invest up to $25 billion (Rs 1,24,432 crore) in government debt securities through auction route, while the cap currently stands at $5 billion (Rs 29,137 crore) for government debt bonds through 'on tap' route.

While the limit in the first category has been exhausted by over 97 per cent, the second category is also already used by nearly 84 per cent.

Foreign investors are allowed to invest further $5.5 billion in treasury bills, out of which nearly 14 per cent is used as of now.

In corporate debt, the upper cap currently stands at $51 billion and nearly 57 per cent of this limit has been exhausted by the foreign investors.

The overall investment cap for debt securities currently stands at $81 billion (Rs 3,97,892 crore), which also includes $2 billion for commercial papers and $5 billion for credit enhanced bonds.

Out of this overall limit, the total investments and limits acquired by foreign investors currently stands at Rs 2,83,984 crore (Rs 2,839.84 billion) which is over 71 per cent of the permitted limits.