India`s market regulator said on Thursday foreign investors would be allowed to buy rupee-denominated corporate debt on tap until they reach 95 percent of the 2.44 trillion rupees ($37.87 billion) allocated to them.
Once that 95 percent limit is reached, however, custodians must halt any foreign investors orders, and the remainder would be sold off under an auction format, Securities and Exchange Board of India (SEBI) said in a statement.
Furthermore, SEBI said that Indian corporate issuers would also be prevented from selling rupee-denominated debt abroad until the foreign ownership in corporate debt falls below 92 percent of the quota.
Issuers and overseas funds could soon have to face the new rules given foreign portfolio investors have utilised 92.9 percent of the limits in corporate bonds, according to data from National Securities Depository Ltd (NSDL).
India has attracted big foreign investment flows to its debt markets on the back of a strong rupee and bets on low inflation and an improving economy.For full statement see: http://bit.ly/2uFBXh1($1 = 64.4300 Indian rupees)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)