Investment via P-notes continues to climb; hits 40-month high in July

By: |
August 20, 2021 5:03 PM

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly.

Until the incumbents are fully onboard, investors of long-term patient capital will need to remain patient.Until the incumbents are fully onboard, investors of long-term patient capital will need to remain patient.

Investments in the Indian capital markets through participatory notes (P-notes) rose to Rs 1.02 lakh crore till July-end, making it the highest level in last 40 months.

This also marks the fourth consecutive monthly growth.

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.

According to Sebi data, the value of P-note investments in Indian markets — equity, debt and hybrid securities — rose to Rs 1,01,798 crore at July-end from Rs 92,261 crore as of June 30, 2021.

Prior to that, the investment level was at Rs 89,743 crore at May-end, Rs 88,447 crore at April-end and Rs 89,100 crore as of March 31, 2021.

Of the total Rs 1,01,798 crore invested through the route till July, Rs 93,150 crore was invested in equities, Rs 8,290 crore in debt and Rs 358 crore in hybrid securities.

The month of July 2021 saw the highest level of investment since March 2018, when fund inflow through such route stood at Rs 1,06,403 crore, and experts said the trend indicated growing confidence of overseas investors into domestic markets.

The assets under the custody of FPIs have increased to Rs 48.36 lakh crore at July-end from Rs 48 lakh crore at the end of June.

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