The Securities and Exchange Board of India (SEBI) will conduct on Thursday an auction for grant of investment limits to foreign investors in government debt securities worth over Rs.42,000 crore, the biggest sale of G-Secs so far this year.
First auction
It would be the first auction for debt securities since a hike in the investment limits for FIIs in government debt to $30 billion, from $25 billion previously, earlier this month.
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Besides, an expert committee recently recommended to SEBI that the regulator should further ease the regulations governing registration for FIIs, and make it easier for them to invest in India. The proposals are likely to be discussed by the SEBI’s board next week.
The planned auction follows a robust interest shown by foreign institutional investors (FIIs) for sale of government debt bond investment limits to the tune of Rs.5,533 crore last month, which had attracted bids worth more than Rs.10,000 crore.
A total of 68 FIIs had participated in the last month auction, while 26 bids were declared successful.
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However, the FIIs have been mostly selling their investments in Indian debt securities in the past few weeks.
So far in June, FIIs had made a net outflow of over Rs.20,000 crore from the debt securities, after a net inflow of close to Rs.25,000 crore in the first five months of 2013.
The domestic debt markets had witnessed robust interest from FIIs last year as well, when their net investments stood at close to Rs.35,000 crore.
Designated platform
The bidding on Thursday would be held on a designated electronic exchange platform of the Bombay Stock Exchange between 3.30 pm and 5.30 pm, the bourse said in a circular. The FIIs need to bid for investment limits in an auction conducted periodically by SEBI as per the available limits, pursuant to which they can invest in the bond market.