Govt bonds worth Rs 2,521 crore to be auctioned for FIIs

Auction to be held on Monday

The National Stock Exchange (NSE) will auction on Monday government debt securities worth Rs 2,521 crore for overseas investors, whose total investment has crossed 97% of the permitted limit.

The auction follows robust interest shown by foreign investors for the sale of government bond investments to the tune of Rs 7,152 crore last month.

Their total investment in government debt has reached Rs 97,025 crore on July 17, which is 97.47% of the total permitted limit of Rs 99,546 crore.

Consequently, the NSE will conduct an auction on July 21 for allocation of unutilised investment limits worth Rs 2,521 crore in government debts, the bourse said in a circular.

The auction will begin at 1530 hours and close on 1730 hours. A mock bidding session would be conducted today to check the system performance.

In the last month's auction conducted by the NSE, sale of government securities had attracted bids worth Rs 9,361 crore as against Rs 7,152 crore offered.

To boost foreign fund inflows into the capital markets here, regulator Sebi in September last year allowed overseas entities to invest in government securities without any auction till such investments reach 90% of permitted limits.

Once this limit is reached, the auction mechanism now get triggered for allocation of the remaining limits.

Foreign investors have invested a net amount of over Rs 73,000 crore in debt market so far in 2014. Equity market has also seen similar trends, with overseas fund inflow of over Rs 68,000 crore since the beginning of the year.