P-note inflows rise for 7th mth

Investment in the Indian capital markets through participatory notes (P-notes) rose over a six-year high at Rs1.33 lakh crore at September-end, making it the seventh consecutive monthly increase, on the back of robust macroeconomic fundamentals.

This is the highest level since July 2017, when investment through the route stood at Rs1.35 lakh crore, data from the Securities and Exchange Board of India (Sebi) showed. The latest data includes the value of P-note investments in Indian equity, debt, and hybrid securities. Participatory 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 -- stood at Rs1,33,284 crore at the end of September as compared to Rs1,28,249 crore a month earlier. In comparison, investment through the route was Rs1.23 lakh crore in July, Rs1.13 lakh crore in June, Rs1.04 lakh crore at May-end, Rs95,911 crore at April-end, Rs88,600 crore at March-end, Rs88,398 crore at February-end and Rs91,469 crore at January-end. The growth in P-notes generally aligns with the trend in FPI flows. When there is a global risk to the environment, investment through this route increases, and vice-versa. Market analysts say one of the prime factors for the growth in P-notes investments is the stable Indian economy against an uncertain global macro backdrop.