Inflows into P-notes at 43-mth high in Oct

New Delhi: Investments in Indian capital through participatory notes (P-notes) rose to Rs1.02 lakh crore till October-end, making it the highest level in 43 months.

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. They, however, need to go through a due diligence process. According to Securities and Exchange Board of India (Sebi) data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- was at Rs 1,02,553 crore by October end. This was the highest level since March 2018, when P-notes had invested to the tune of Rs 1,06,403 crore.

Abhay Agarwal, Founder and Fund Manager, Piper Serica, a Sebi-registered PMS, said that the overall investment via P notes increased by more than Rs 5,000 crore in October to hit a new high of Rs 1.02 lakh crore. "More interestingly, the value of equity went up by almost Rs 7,000 crore while the value of debt investments fell by Rs 2,000 crore. This change in stance by FPIs is not surprising since there are expectations that long-term interest rates have hit a bottom and faced with inflationary pressures RBI will be forced to increase rates in 2022" he added.

At the end of September this year, the investment level was at 97,751 crore, Rs 97,744 crore by August end. The figure for July was revised to Rs 85,799 crore from Rs 1,01,798 crore posted earlier. Prior to that, the investment level was at Rs 92,261 crore by June-end, Rs 89,743 crore by May-end, Rs 88,447 crore at April-end, and Rs 89,100 crore by March-end. Of the total Rs 1,02,552 crore invested through the route till October, Rs 93,213 crore was invested in equities, Rs 8,885 crore in debt, Rs 455 crore in hybrid securities.

Divam Sharma, Co-founder, Green Portfolio, a Sebi-registered PMS, said the October number reflects the continued high conviction of FPI's towards Indian equities.