Investments in Indian capital through participatory notes (P-Notes) rose to ₹1.02-lakh crore till October-end, making it the highest 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 SEBI data, the value of P-Note investments in Indian markets – equity, debt, and hybrid securities – was at ₹1,02,553 crore by October-end. This was the highest level since March 2018, when P-notes had invested ₹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 ₹5,000 crore in October to hit a new high of ₹1.02-lakh crore.

Equity value

“More interestingly, the value of equity went up by almost ₹7,000 crore, while the value of debt investments fell by ₹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 and ₹97,744 crore by August-end. The figure for July was revised to ₹85,799 crore from ₹1,01,798 crore posted earlier.