P-notes investment retreats from 31-month high

Investment through participatory notes (P-notes) in the Indian capital market dipped marginally to Rs 84,976 crore as on January 31 after hitting 31month high value at the end of the preceding month.

At December-end, the investment through such instruments had risen to a 31-month high of Rs 87,132 crore, reflecting the bullish stance of FPIs, as per market experts.

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They are required to go through a due diligence process.

The investment level fell to an over 15-year-low of Rs 48,006 crore at the end of March amid significant volatility in broader markets on concerns over the coronavirus-triggered crisis.

However, since then, the investments rose for five consecutive months till August-end when it stood at Rs 74,027 crore. In September, it had decreased to Rs 69,821 crore.

Thereafter, the investments again kept rising only to dip marginally at January-end.

According to Sebi data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -decreased to Rs 84,976 crore till January-end.

Of the total Rs 84,976 crore invested through the route till January, Rs 77,724 crore was invested in equities, Rs 6,574 crore in debt, and Rs 679 crore in hybrid securities.

Meanwhile, investments by FPIs stood at Rs 14,631 crore on net basis between January 1-29.

They invested Rs 19,473 crore into equities, pulled out Rs 4,824 crore from debt segment and took out Rs 17 crore from hybrid securities, which translated into total net investment of Rs 14,631 crore.