SEBI hikes FPI investment limit for government debt

New Delhi: To boost inflows of foreign funds into Indian capital markets, regulator Sebi today raised the FPI investment limit in government securities to Rs 1.48 lakh crore, which will be further increased to Rs 1.52 lakh crore from next January.

The existing limit for Foreign Portfolio Investors (FPIs) is Rs 1.44 lakh crore.

It also decided to enhance limit for investment by long- term FPIs (Sovereign Wealth Funds, Insurance Funds, Pension Funds and Foreign Central Banks) in government securities in two tranches from October 3 and January 2, 2017.

For long-term FPIs, limit has been enhanced to Rs 62,000 crore from today onwards. It would be further increased to Rs 68,000 crore from January 2, 2017.

Besides, limit for investment by all FPIs in state development loans (SDL) increased to Rs 17,500 crore. Further, it would be enhanced to Rs 21,000 crore on January 2, 2017.

"The incremental limits for Long Term FPIs shall be available for investment on tap with effect from October 3, 2016 and January 2, 2017 respectively," Securities and Exchange Board of India (Sebi) said in a circular.

The incremental limits of Rs 3,500 crore each for investment by FPIs in SDLs would be available for investment on tap with effect from today and January 2, next year respectively.