How overseas investors rushed to buy space in Corporate bonds

MUMBAI: Corporate bonds are becoming more popular with overseas investors, who are queuing up to buy positional thresholds to include more such instruments in their Indian portfolios.

India on Wednesday auctioned corporate bond “limits” after four and half years, and the exercise resulted in over-subscriptions of 1.4 times the quantum of securities on offer.

"This alone shows market exuberance," said Ajay Manglunia, executive vice president at Edelweiss Finance. “Overseas investors have got a taste of corporate bonds, which yield higher than government bonds with a bit of risk. But overseas investors look comfortable with that limited risk.”

The auction was conducted on the stock exchange platform during market hours. There were 29 bids.

In the past few months, overseas investors have been pouring money into corporate bonds, with 92% of the limit exhausted. The authorities have recently mandated that the limit will be auctioned once actual subscription crosses the 92% threshold.