The Securities and Exchange Board of India (SEBI) has confirmed that the cumulative quantitative limit of US$500 million on foreign investment in corporate bonds has been reached – indeed, breached – and will not be raised.
No further purchases by investors will be permitted in corporate debt until further notice, says a spokesman for Citigroup in Mumbai. Although all foreign investors holding corporate bonds will be allowed to hold their instruments until maturity, they will not be permitted to roll them over or reinvest on sale or maturity.
SEBI has also confirmed that the separate cumulative ceiling of US$1,750 million on foreign investment in government bonds is separate, and not fungible with the corporate limit.