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Unrestricted foreign debt limits see good demand

Reuters/Mumbai 20 Jun 12 | 06:07 PM

Foreign investor interest in India's unrestricted and unutilised corporate and government bond limits auction was strong, but longer maturity papers were under-subscribed, four market sources told Reuters.

Sebi auctioned Rs 1,464 crore in government bonds under the no-residual maturity restriction category, and 38.37 billion rupees for debt with residual maturity of over 5 years.

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The limit for government bonds with no restrictions was over-subscribed at Rs 2,902 crore, though the limits for long-term category debt was under-subscribed at Rs 2,437 billion. The cut-offs came in at 0.0610 percent and 0.000010 percent, respectively.

For corporate bonds with no residual maturity or sector restriction, the unused limit to be sold was Rs 1,599 crore, while the amount to be sold for corporate bonds in the long-term infrastructure category was Rs 7,802 crore.

The bids received in the unrestricted category totalled Rs 3,533 crore at a cut-off of 0.2420 percent, compared with 0.135 percent in last month's auction.

The cut-off on the long-term corporate bonds under the infrastructure category was 0.000020 percent with a total of Rs 6,381 crore in bids received.

"Most of the foreign investors who sold their investments in equities are left with cash and deployed this in debt as they will incur a huge loss if they take their money out of India now due to the rupee's depreciation," said a foreign bank dealer involved with the auction.

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Company Price Gain (%)
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GAIL (India)384.201.48
B H E L189.301.42
Tata Steel426.601.32
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