BSE to auction Rs 507-crore government bonds for FIIs

The Dollar Business Bureau Opening yet another opportunity for foreign investors, the Bombay Stock Exchange (BSE) on April 24, 2015 announced the auction of government debt securities worth Rs 507 crore for FIIs (Foreign Institutional Investors) to be held on April 27, 2015. "Live bidding session for allocation of debt investment limits for FII and sub-accounts shall be conducted on Monday, April 27, 2015 on Exchange’s platform,” the bourses said in a circular released on Friday. The announcement came a day after the Finance Minister, Arun Jaitley, said that the government will soon clarify the rules of the Minimum Alternate Tax (MAT) being imposed on overseas investors. The auction will take place at BSE's 'ebidxchange' platform from 1530 hours to 1730 hours, after close of normal business hours. The BSE is conducted a mock bidding session on Thursday to check the system performance. As per existing rules, foreign investors are allowed to invest up to US$ 25 billion (Rs 124,432 crore) in government debt securities through auction route, while they can invest up to US$ 51 billion in corporate bonds. Among foreign investors, corporate debt securities are more in demand as compared to government bonds. The lack of interest was attributed to the restriction on re-investment of government bonds. But with the market regulator, Securities and Exchange Board of India, easing the norms, now overseas investors can re-invest in government bonds on the same day. The impact of new norm has resulted in the total foreign fund inflows crossing Rs 81,000 crore since January this year. In 2014, the net investment of foreign investors was Rs 2.56 lakh crore.    

This article was published on April 24, 2015 – 11:59 pm IST.