The Securities and Exchange Board of India (Sebi) said on Tuesday an auction of bonds for foreign institutional investors, governed by the new debt limits, would be held through a special three-hour window on July 4.
The move follows yesterday’s enhancement of the FII investment limit in government securities (G-secs) by $5 billion, to $20 billion by the Reserve Bank of India (RBI). At the auction, $5 billion of G-secs and another $7 billion of corporate long-term infrastructure debt will be sold to eligible FIIs.
Sebi has said no single FII shall be allocated more than Rs 2,850 crore of the investment limit of G-secs and Rs 3,138 crore of corporate debt. The change comes with residual maturity of three years in place of the earlier five years. The central bank has also reduced the lock-in period for long-term corporate infrastructure debt from three years to one year.
Out of the existing $15 billion in G-secs, $10 billion which has no tenure restriction is completely utilised. Of the remaining $5 billion, which had a residual maturity of five years, a small portion is unutilised.
