P-Notes investment rises to Rs 1.64 lakh crore in Feb

New Delhi: Foreign investments into Indian markets through participatory notes (P-Notes), a preferred route for HNIs and hedge funds, rose moderately to Rs 1.64 lakh crore (over $30 billion) in February.

According to the latest data released by the Securities and Exchange Board of India (Sebi), the cumulative value of P-Note investments in Indian markets (equity, debt and derivatives) was at Rs 1,64,271 crore at the end of February. In January, P-Note investments in Indian markets was at Rs 1.62 lakh crore.

[caption id=“attachment_703234” align=“alignleft” width=“380”] P-Notes investment rises to Rs 1.64 lakh crore in Feb. Reuters[/caption]

P-Notes, mostly used by overseas HNIs (High Networth Individuals), hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors (FIIs), while saving on time and costs associated with direct registrations.

More from Investing

MSMEs are breaking the traditional convention. Look who’s funding them Scale-up your startup without an investor! Here’s how

Notably, investments into Indian shares through P-Notes was at Rs 1.77 lakh crore in November and Rs 1.75 lakh crore in October on policy reform measures taken by the government and its initiatives to address tax-related issues. Besides, the value of P-Notes issued with derivatives as underlying, was at Rs 1.05 lakh crore at February-end. The quantum of FIIs investments through P-Notes increased to a six-month hight at 12.33 per cent in February from 11.83 percent in the previous month. This was the highest figure since August last year, when FIIs investment via P-Notes stood at 12.7 percent.

Till a few year-ago, the P-Notes used to account for more than 50 per cent of total FII investments, but their share has fallen after Sebi tightened its disclosure and other regulations for such investments. The PNs have been accounting for mostly 15-20 per cent of total FII holdings in India since 2009, while it used to be much higher, in the range of 25-40 per cent in 2008. However, it was as high as over 50 percent at the peak of Indian stock market bull run during a few months in 2007.

FIIs, the key driver of Indian markets, poured in Rs 24,439 crore ($4.57 billion) into the country’s equities in February. Additionally, FIIs also infused Rs 4,001 crore ($743 million) in debt market during the period under review.

PTI