National Stock Exchange (NSE) will on Monday auction government debt securities worth Rs. 2,521 crore for overseas investors whose total investment has crossed 97 per cent of the permitted limit.
The auction follows robust interest shown by foreign investors for the sale of government bond investments to the tune of Rs. 7,152 crore last month.
Their total investment in government debt has reached Rs. 97,025 crore on July 17, which is 97.47 per cent of the total permitted limit of Rs. 99,546 crore.
Consequently, the exchange said in a circular that it will conduct an auction on July 21 for allocation of unutilized investment limits worth Rs. 2,521 crore in government debts.
The auction will begin at 3:30 p.m. and close at 5:30 p.m. A mock bidding session would be conducted today to check the system performance.
In the last month’s auction conducted by NSE, sale of government securities had attracted bids worth Rs. 9,361 crore as against Rs. 7,152 crore offered.
To boost foreign fund inflows into the capital markets here, the Securities and Exchange Board of India (Sebi) in September last year allowed overseas entities to invest in government securities without any auction till such investments reach 90 per cent of permitted limits.
Once this limit is reached, the auction mechanism gets triggered for allocation of the remaining limits.
Foreign investors have invested a net amount of over Rs. 73,000 crore in debt market so far in 2014. Equity market has also seen similar trends with overseas fund inflow of over Rs. 68,000 crore since the beginning of the year.