Investments in Indian capital through participatory notes (P-notes) were at Rs 97,751 crore till September-end, and going forward inflow is expected to remain positive.
Investments in Indian capital through participatory notes (P-notes) were at Rs 97,751 crore till September-end, and going forward inflow is expected to remain positive. 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. They, however, need to go through a due diligence process.
According to Securities and Exchange Board of India data, the value of P-note investments in Indian markets — equity, debt and hybrid securities — was at Rs 97,751 crore by September-end compared to Rs 97,744 crore by August-end. The figure for July was revised to Rs 85,799 crore from Rs 1,01,798 crore posted earlier. Prior to that, investment level was at Rs 92,261 crore by June-end, Rs 89,743 crore by May-end, Rs 88,447 crore at April-end and Rs 89,100 crore by March-end.
Of the total Rs 97,751 crore invested through the route till September, Rs 86,624 crore was invested in equities, Rs 10,873 crore in debt, Rs 547 crore in hybrid securities and Rs 68 crore in derivatives.
Sonam Srivastava, founder, Wright Research, Sebi-regustered investment adviser, said that the notional value of the investment in equities has been declining in the last three months while the notional value of the investment in debt by ODIs (offshore derivative instruments) is rising. This slight slowdown and shift to debt might be attributed to the uncertainty about future stimulus packages and rate cuts which have been a good source of liquidity coming to equity, she said.
According to her, September was a great month for P-note flows and hints at a positive sentiment for the Indian markets among foreign investors. The earning season for India Inc this quarter is looking very promising and the good earnings numbers should attract further foreign capital into India via P-notes.
“We are positive for the momentum in the Indian markets to last long term and expect the investment via P-notes to be buoyant going forwards,” she added. Besides, assets under the custody of FPIs too increased to Rs 53.71 lakh crore in September-end from Rs 52 lakh crore in August-end.
FPIs infused a net sum of Rs 13,154 crore in equities and Rs 12,803 crore in the debt market last month.