FII investment limit in government and corporate debt raised by $5 billion
23 Sep 2010
The government has doubled the current investment limit of foreign institutional investors (Flls) in government securities by $5 billion to $10 billion. FIIs, however, has to invest the incremental limit of $5 billion in securities with residual maturity of over five years, an official release said today.
The government has also increased the Fll investment limit in corporate bonds by $5 billion, raising the cap to $20 billion.
The incremental limit of $5 billion has to be invested in corporate bonds with residual maturity of over five years issued by companies in the infrastructure sector.
Currently, Flls can invest up to $5 billion and $15 billion in government securities and corporate bonds, respectively.
The enhancement of the Fll investment cap is intended to provide avenues for increased Fll investments in debt securities, especially in the infrastructure sector as also to broaden the government securities and corporate bond markets in the country.
The policy has been reviewed in the context of lndia's evolving macroeconomic situation, its increasing attractiveness as an investment destination and need for additional financial resources for the country's infrastructure sector, the release added.