P-notes investment jumps to Rs 78,110 crore at March-end

Mumbai : With positive market sentiments, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March. According to Securities and Exchange Board of India (SEBI) data, total value of P-note investments in Indian markets including equity, debt and derivatives, at March end climbed to Rs 78,110 crore from Rs 73,428 crore at the end of February.

Of the total, P-notes holdings in equities at March-end were at Rs 56,288 crore, while in debts and derivatives were at Rs 20,999 crore and Rs 119 crore respectively. Besides, the quantum of FPI investments via P-notes declined to 2.3% during the period under review from 2.4% in the preceding month. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly after going through a due diligence process.

Prior to this, investment via P-notes were on declining trend as in December it was Rs 79,513 crore then it fell to Rs 75,693 crore in January and Rs 73,428 crore in February. Earlier, in July 2017, SEBI had notified stricter norms stipulating a fee of $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes.

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