Investments through P-notes rise to a nearly six-year high of Rs 1.5 trillion
Investments through participatory bonds in Indian capital markets reached Rs 1.5 lakh crore at the end of February, marking the highest level in almost six years, driven by strong performance of the domestic economy.
The latest data includes the value of P-note investments in Indian equity, debt and hybrid securities.
Participatory notes (P-notes) are issued by registered foreign portfolio investors (FPIs) to foreign investors who want to participate in the Indian stock market without registering themselves directly. However, they must go through a due diligence process.
According to the latest data from market regulator Sebi, the value of investments in P-notes in the Indian markets – equity, debt and hybrid securities – stood at Rs 1,49,517 crore at the end of February, compared to Rs 1,43,011 crore at the end of January.
The amount has reached the highest level since June 2017, when investments through the route stood at Rs 1.65 lakh crore, Securities and Exchange Board of India (Sebi) data showed.
The growth of P-notes is generally in line with the trend of FPI flows. When there is a global risk to the environment, investments through this route increase, and vice versa.
Market experts said the inflows in February can be attributed to robust corporate earnings and positive economic growth trends observed during the December quarter.
India’s economic growth accelerated to 8.4 percent in the third quarter of 2023-24, mainly due to the good performance of the manufacturing, mining and quarrying and construction sectors.
Of the total Rs 1.5 lakh crore invested through this route till February, Rs 1.27 lakh crore was invested in equity, Rs 21,303 crore in debt and Rs 541 crore in hybrid securities.
Moreover, assets under the custody of the FPIs grew to Rs 68.55 lakh crore at the end of February, against Rs 66.96 lakh crore in the previous month.
Meanwhile, FPIs invested a net amount of Rs 1,539 crore in Indian equities and Rs 22,419 crore in the debt market in February.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
First print: May 6, 2024 | 4:52 PM IST