The share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped Rs 79,247 crore at the end of November. 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 November end climbed to Rs 79,247 crore from Rs 66,587 crore at the end of October. In September, the value of P-note investments stood at Rs 79,548 crore.
Of the total, P-note holdings in equities at November-end were at Rs 62,971 crore, while in debts and derivatives were at Rs 15,044 crore and Rs 1,232 crore respectively. Besides, the quantum of FPI investments via P-notes rose to 2.5% during the period under review from 2.2% in the preceding month. P-note investments were on a decline since June last year and hit an over eight-year low in September 2017. This drop in investment trend continued till 2018. However, these investments rose slightly in August and again dropped in September and October.
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. In December, capital market regulator SEBI relaxed its norms for clubbing of investment limits by well regulated foreign investors.