New Delhi:  Investments in domestic capital markets through participatory notes (P-Notes) have plunged to 41-month low of Rs 1.57 lakh crore in December.

Market experts believe the trend is likely to continue as Sebi may further tighten the regulations governing P-Notes amid persisting concerns that this route is being used for illicit fund flows. P-Notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to participate in Indian markets without registering themselves directly. But they still need to go through a proper due diligence process.

According to Sebi data, the total value of P-Note investments in Indian markets — equity, debt and derivatives — plunged to Rs 1,57,306 crore in December-end from Rs 1,79,648 crore at the end of November. This was the lowest level since July 2013 when the cumulative value of such investments stood at Rs 1,48,188 crore, reports PTI.

The investment through the route has been falling since September last year, when it was at Rs 2,12,509 crore. It fell to Rs 1,99,987 crore in October-end, and further in November.

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