Signalling strong demand for government bonds, overseas investors today put in bids worth Rs 2,094 crore, oversubscribing a Rs 676 crore auction for debt securities by three times.
The auction was was held at 'nse-ebid' platform for allocation of investment limits in government debt securities worth Rs 646 crore (USD 105 million). The auction attracted bids for Rs 2,094 crore (USD 342 million), as per the bourse.
At the end of 2-hour auction this evening, as many as 66 bids were made in the auction, of which 13 were declared successful.
The debt auction quotas give overseas investors the right to invest in debt up to the limit purchased.
The total overseas investments in government debt securities through auction route had touched Rs 1,23,786 crore as on October 17, which is which is 99.48 per cent of total permitted limit of Rs. 1,24,432 crore.
Consequently, the exchange decided to conduct an auction for the allocation of unutilised debt limits.
In the auction conducted by National Stock Exchange earlier this month, government bonds had attracted bids worth Rs 4,963 crore as against securities valued Rs 3,117 crore on offer.
Foreign investors have put in over Rs 1.2 lakh crore in the debt market so far in 2014. The equity market has also seen similar trends with overseas fund inflows of over Rs 83,000 crore since the beginning of the year.
According to market experts, overseas investors have been pumping money in the country's debt market primarily on account of government's reforms agenda and the RBI's pledge to tame inflation.
As per norms, foreign investors can purchase up to USD 25 billion in government debt without restrictions. Exchanges initiate the auction mechanism once overseas investors reach 90 per cent of that limit.
