Money/ Representational Image
Money/ Representational Image

As foreign portfolio investments (FPI) returned in October, investments made through participatory notes (P-notes) also surge to Rs 78,686 crore in the past 14 months.

The rise in investment through P-notes came on the back of improved liquidity inflow globally and in India amid the pandemic.

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors, to allow the latter to invest in the Indian capital market without getting registered. The process, however, has to go through due diligence.

Value of participatory notes issued in October stood at Rs 78,686 crore, up from Rs 69,821 crore in September, according to data from the Securities and Exchange Board of India (SEBI).

It is the highest investment through P-notes since August 2019, when a total of Rs 79,088 crore came in through the route of participatory notes.

Out of the total Rs 78,686 crore invested through the route till October, Rs 68,415 crore was invested in equities, Rs 10,047 crore in debt and Rs 224 crore in hybrid securities.

After dropping to Rs 48,006 crore in March, amid the impact of Covid, investments through the route was gradually increasing till it fell on a month-on-month basis Rs 69,821 crore.

In August this year, value of P-notes issued stood at Rs 74,027 crore.

Assets under custody of FPIs in October was over Rs 34.36 lakh crore, up from Rs 33.22 lakh crore in September.

Net FPI investment in the Indian capital market stood at Rs 21,826.13 crore last month, after pulling out a net amount amout of Rs 1,128.34 crore in September, according to data from NSDL.

Analysts said that the rise in investment through P-notes rose amid the continued inflow in equities and the momentum is set to continue.

In November too, there has been strong FPIs inflow in Indian equity market.

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Free Press Journal