SEBI auction today for FII bond investment limits

The Securities & Exchange Board of India is conducting an auction today for the grant of investment limits to foreign investors in government debt securities worth more than Rs23,000 crore.

At the auction, to be held on the National Stock Exchange, foreign institutional investors (FIIs) would be able to bid for investment limits of Rs23,661 crore in government bonds.

The auction follows robust interest shown by FIIs for the sale of government debt bond investment limits to the tune of Rs42,000 crore last month.

The biggest sale of government securities so far this year, it had attracted bids worth Rs39,171 crore. A total of 37 FIIs had participated in last month's auction.

The encouraging response last month came at a time when FIIs have been pulling out of the Indian debt market.

Since the beginning of June, FIIs had made a net outflow of over Rs44,331 crore from debt securities, after a net inflow of about Rs25,000 crore in the first five months of this year.

The Indian debt markets had witnessed robust interest from FIIs last year as well, when their net investments stood at close to Rs35,000 crore.

The bidding will be held on a designated electronic exchange platform of the NSE between 3:30pm and 5:30pm, the bourse said in a circular.

It is the second auction for debt securities since a hike in the investment limits for FIIs in government debt to $30 billion, from $25 billion previously, last month.

FIIs need to bid for investment limits in an auction conducted periodically by SEBI as per the available limits, after which they can invest in the bond market up to that limit.

The SEBI auction of debt limits for FIIs is conducted on the 20th of every month. The government recently relaxed ownership limits in Indian debt for FIIs.