SEBI hikes investment cap for FPIs in G-secs

India Infoline News Service | Mumbai |

Present debt investment limits available for FPI investments in G-secs include a USD 20 billion limit

The SEBI has decided to enhance the investment limit in government securities available to all FPIs by USD 5 billion by correspondingly reducing the amount available to long term FPIs from USD 10 billion to USD 5 billion within the overall limit of USD 30 billion.

The incremental investment limit of USD 5 billion (INR 24,886 cr) shall be required to be invested in government bonds with a minimum residual maturity of three years, SEBI said in a circular on 24 July.

Further, all future investment against the limit vacated when the current investment by an FPI runs off either through sale or redemption shall also be required to be made in government bonds with a minimum residual maturity of three years.

It is, however, clarified that there will be no lock-in period and FPIs shall be free to sell the securities (including those that are presently held with less than three years of residual maturity) to the domestic investors.

Present debt investment limits available for FPI investments in Government securities (G-Secs) include a USD 20 billion limit for all FPIs and another USD 10 billion limit for Long Term FPIs. While the USD 20 billion limit has been fully utilized, the USD 10 billion limit has been utilized only up to 22.86%.
 

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