Sebi hikes FPI investment limit for govt debt, corporate bonds in two tranches

It has been decided to enhance limit for investment by FPIs in two tranches from April 12 and October 1.

The move is part of an effort by Securities and Exchange Board of India (Sebi) to push inflow from overseas investors in the country's capital markets.

"Limit for FPIs in central government securities shall be enhanced to Rs 2,07,300 crore on April 12 and Rs 2,23,300 crore on October 1, respectively," the regulator said in a circular. Earlier, investment limit for foreign portfolio investors (FPIs) was Rs 1,89,700 crore.

Besides, limit for long term FPIs -- sovereign wealth funds, multilateral agencies, insurance funds, pension funds and foreign central banks — in central government securities has been enhanced to Rs 78,700 crore from on Thursday. This will be further increased to Rs 92,300 crore on October 1. Earlier, the existing limit was Rs 44,100 crore for long term FPIs.

"The sub-limit for investment by long term FPIs in the infrastructure sector shall be done away with and the existing investment and free limits shall be merged into the corporate debt investment limits.

"Further, all the existing sub-categories under the category of corporate bonds will be discontinued and there would be a single limit for FPI investment in all types of corporate bonds," Sebi noted.

The corporate debt investment limit has been moved upwards to Rs 2,66,700 crore from on Thursday and the figure will be further increased to Rs 2,89,100 crore from October. The existing limit was Rs 2,44,323 crore. Also, debt limit of state development loans (SDLs) has been increased to Rs 34,800 crore. It will further rise to Rs 38,100 crore. The existing limit for the category was Rs 31,500 crore.