Investment through participatory notes (P-Notes) into India's capital markets has hit a 16-month low of Rs 2.31 lakh crore at the end of January amid weakness in equity markets. P-Notes, which are mostly used by overseas HNIs (high net worth individuals), hedge funds and other foreign institutions, allow investors to invest in Indian markets through registered foreign portfolio investors (FPIs), the key driver of Indian markets. This saves time and cost for them, but the flip side is the route can also be used for round-tripping of black money. According to Sebi data, total value of P-Notes investment in Indian markets (equity, debt and derivatives) has been falling since October. It declined to Rs 2,31,317 crore at the end of January from Rs 2,35,534 crore in the previous month. Total value of P-Notes investment in Indian markets stood at Rs 2.58 lakh crore and Rs 2.54 lakh crore in October and November, respectively. It stood at Rs 2.54 lakh crore in September. Of the total, P-Note holdings in equities were at Rs 1.41 lakh crore at January-end and the remaining holdings were in debt and derivatives markets. The January figure marks the lowest level since September 2014, when the cumulative value of such investments stood at Rs 2.22 lakh crore. The quantum (percentage) of FII investments via P-Notes rose to 10.5 per cent in January, from 10.1 per cent in the preceding month. Meanwhile, the benchmark Sensex plunged nearly 5 per cent during the period under review. Till a few years ago, P-Notes used to account for more than 50 per cent of the total FII investment, but their share has fallen over the years after Sebi tightened disclosure norms and other related regulations. As things stand, P-Notes make up around 15-20 per cent of the total FII investment in India since 2009. While it used to be much higher, 25-40 per cent in 2008, the reading was as high as over 50 per cent at the peak of stock market bull run in 2007. In absolute terms, the value of P-Notes investment rose to a record of Rs 4.5 lakh crore in October 2007, but dropped to Rs 3.22 lakh crore in February 2008 and Rs 60,948 crore in February 2009.