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Showing strong interest in the Indian debt market, foreign investors have put in bids worth over Rs 10,000 crore to buy government bonds, bidding nearly twice the amount of the securities in a Sebi-conducted auction.
The one-day auction was held on the National Stock Exchange platform yesterday for grant of investment limits to FIIs, for government debt securities worth Rs 5,533 crore, but the bids received by FIIs (foreign institutional investors) totalled as much as Rs 10,146 crore.
A total of 68 FIIs had participated in the auction, although the number of successful bid stood at 26.
The robust interest in government bonds comes even after Standard & Poor's (S&P) had warned last week that it may downgrade India's sovereign rating to junk grade if the government fails to pursue reforms and check deterioration in fiscal and current account deficit in next 12-month.
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.
Sebi auction debt limits for FIIs is conducted on the 20th of every month.
Also, the government had relaxed ownership limits in Indian debt for FIIs in April.
Last month, Sebi had conducted an auction for grant of permission to FIIs for investments worth up to Rs 29,108 crore in government bonds.
Indian markets witnessed robust interest from FIIs last year and the momentum has continued so far. FIIs have pumped in Rs 28,148 crore since the beginning of 2013, after putting in Rs 34,988 crore in the debt securities last year.
