FPIs can buy corp debt limit worth Rs 9,500 crore in infra sector

Sovereign wealth funds and other long term foreign portfolio investors (FPIs) can buy up to Rs 9,500 crore worth corporate debt in infrastructure sector, markets regulator Sebi today said.

This comes after RBI's decision to exclude foreign investment in rupee denominated bonds, popularly known as masala bonds, from the combined corporate debt Limit (CCDL).

This sub-limit for long-term FPIs for infrastructure sector would be Rs 9,500 crore from October 3 and would be further enhanced to Rs 19,000 crore on January 1, Sebi said in a circular.

The new limit will be within the overall corporate debt investment limits (CDIL), the Securities and Exchange Board of India (Sebi) said.

Sovereign wealth funds, multilateral agencies, insurance funds, pension funds and foreign central banks are long term FPIs.

The markets regulator said foreign investments in rupee denominated bonds would no longer be reckoned against the combined corporate debt limit from October 3.

Further, the CCDL would be renamed as the corporate debt investment limits for FPIs and the upper limit for corporate debt would be stated only in rupee terms.

Till September 22, foreign investments in rupee denominated bonds were Rs 32,381 crore, while the undrawn amount against such bonds was Rs 11,620 crore.

Thus, a total of Rs 44,001 crore has been reckoned against rupee denominated bonds within the combined corporate debt limit of Rs 2,44,323 crore, which would be carved out of erstwhile CCDL and will be added to the new limit of CDIL.