Amid positive market sentiments, investments through participatory notes (P-notes) in domestic capital market rose to Rs 78,110 crore at the end of March.
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 after going through a due diligence process. According to SEBI data, the total value of P-note investments in Indian markets equity, debt, and derivatives stood at Rs 78,110 crore till March-end. At the end of February, the same was at Rs 73,428 crore. Vinod Nair, the head of research at Geojit Financial Services, said, “The increase in P-notes investment is in line with the higher net inflows of FPIs in the cash segment, which increased from Rs 13,500 crore in February to Rs 32,000 crore in March.” Of the total P-note investments made till March-end, Rs 56,288 crore was in equities, Rs 20,999 crore in debt and Rs 119 crore in derivatives markets. Nair said, “An increase in the India equity exposure is motivated by risk-on strategy adopted in emerging markets, as global bond yield reduced and increased liquidity supported by central banks due to slowdown in world economy.”