FIIs allowed to invest up to $15 billion in GoI paper, up to $20 billion in corporate bonds
17 Nov 2011
The finance ministry has increased the investment limit for foreign institutional investors (FIIs) in Government of India securities to $15 billion from the current $10 billion. The ministry also increased the FII investment limit in corporate bonds to $20 billion from the existing $15 billion.
The $5 billion incremental limit in both government and corporate bonds will be applicable from the date of notification, ministry sources said.
Stock market regulator Securities and Exchange Board of India (SEBI) will issue a detailed circular on the changes soon.
Ministry sources said the hike in investment limit has been necessitated by a dearth of investment channels for FIIs.
FII investments in government bonds in India stood at $8.2 billion (Rs41,253 crore) as of 31 October 2011 while FII investments in corporate bonds were higher at $13.4 billion (Rs68,289 crore) as of end-October 2011.
Also, sources pointed out that both the government and corporates need extra funds and it was therefore necessary to enhance inflow of foreign capital to India.
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