In a biggest sale of G-Secs so far this year, the market regulator - Securities and Exchange Board of India (SEBI) will conduct an auction for grant of investment limits to foreign investors in government debt securities worth over Rs 42,000 crore. This would be the first auction for debt securities since a hike in Foreign Institutional Investors (FIIs) limits in government debt to $30 billion, from $25 billion, earlier this month.
This move by the market regulator follows a robust interest shown by the 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. Besides, an expert committee had also recommended the SEBI to further ease the regulations governing registration for FIIs and make it easier for them to invest in India.
A total of 68 FIIs had participated in last month's auction, while 26 bids were declared successful. SEBI auctions debt limits for FIIs is conducted on the 20th of every month. The government recently relaxed ownership limits in Indian debt for FIIs.
Last year, FIIs invested around Rs 35,000 crore in Indian debt market. However, so far in June, FIIs 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 as investors were concerned over the global uncertainty and weak rupee.
