Foreign Portfolio Investors have pumped in nearly Rs6,000 crore in Government securities, including close to Rs1,000 crore in states bonds, in a single day.
This is addition to investment limits worth about Rs5,600 crore has been purchased through an e-auction. FPIs have made an investment of Rs4,792 crore in Central Government securities and another Rs968 crore in state bonds, taking the total to Rs5,760 crore on October 12 -- the first day when the enhanced limit in Government securities become available, as per latest data available with NSDl (National Securities Depository ltd).
RBI and Sebi earlier this month allowed greater foreign fund flows into the Government securities, which are generally favoured by FPIs over the corporate bonds in India. Following this, an additional Rs16,431 crore was available for investment in various government bonds from yesterday onwards. Out of this, investment limits worth about Rs5,600 crore was being allotted through an e-auction, while the rest would be available on tap.
In further opening up, the limits would be enhanced by another Rs16,600 crore from January 1 ownwards. The cap has been now raised to Rs1,70,000 crore from Rs1,53,569 crore previously. As against the previous limit, the total investments by FPIs in Government bonds stood at Rs1,58,869 crore as on October 12. In comparison, the total investments by FPIs in corporate bonds stood at Rs3,45,488 crore as against a cap of Rs4,14,323 crore.
The enhanced limits include a first-ever separate category for state development debt securities where FPIs can invest up to Rs3,500 crore with effect from Monday. This would be doubled to Rs7,000 crore from January 1.
The auction conducted by the BSE attracted bids of staggering Rs17,266 crore from FPIs, three times higher than securities put on offer valued Rs5,600 crore.