Foreign investors buy $10 billion of Indian govt bonds since JPM inclusion announcement

Foreign ownership of Indian bonds rose to an all-time high of 4.45% of total, compared to 2.77% before the inclusion announcement.

Published on: Jun 19, 2024, 19:46:28 IST

By HT News Desk | Edited by Abhyjith K. Ashokan

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Foreign investors have bought more than $10 billion ( ₹83,426.75 crore) of Indian government bonds that will be included in J.P. Morgan's debt index on June 28, taking international ownership of India's bonds to a record high, Reuters reported.

Overseas buyers now own 1.79 lakh crore rupees of Indian bonds included in the so-called fully accessible route (FAR) which allows unrestricted foreign purchases, according to the report.

Also Read | SBI approves raising up to ₹20,000 crore for FY25 via long term bonds

Foreign ownership of Indian bonds rose to an all-time high of 4.45% of total, compared to 2.77% before the inclusion announcement, the report read.

However, their ownership share of all outstanding government bonds remains lower at 2.4%, compared to the peak of 4.6% in 2017, according to Reuters.

Foreign investors have been shifting from shorter duration bonds to longer ones with maturities of nine years and above.

Also Read | Investors bought ₹27,000 cr of sovereign gold bonds in FY24: RBI report

Western Asset Management, which manages around $250 million ( ₹2,085.67 crore) of debt under its Asian opportunities Fund, is overweight on longer duration Indian government bonds, Wontae Kim, a research analyst said last month.

The government's emphasis on fiscal consolidation and inflation remaining within the central bank's targeted range have been major positives, he said.

India's strong macroeconomic fundamentals and stable currency outlook have encouraged investors to buy bonds without hedging their forex exposure, according to the report.

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HT News Desk
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