Investments via P-notes fall for fourth month in a row, stand at ₹76,611 cr

Dropping for the fourth consecutive month, investments through participatory notes (P-notes) in the Indian capital market stood at ₹76,611 crore at the end of September.

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 after going through a due diligence process.

Investments through P-notes have been continuously declining since June, according to the latest data from markets regulator Sebi.

The total value of P-note investments in the Indian markets -- equity, debt, and derivatives -- declined to ₹76,611 crore till September-end, from ₹79,088 crore at August-end, showed the data.

At the end of July, the Indian capital market saw a total inflow of ₹81,082 crore via P-notes, a fall as compared to ₹81,913 crore till June-end. The investment had stood at ₹82,619 in May.

Of the total investments made till the end of September, ₹50,676 crore was invested in the equities, ₹25 crore in debt and ₹241 crore in the derivatives segment.

In July, the board of Sebi has approved a proposal to rationalise the framework for issuance of P-notes -- an instrument once very popular with foreign investors.

The use of P-notes has been on a decline since 2017 and slumped to a nine-and-a-half year low of ₹66,587 crore at the end of October.

In July 2017, markets regulator Sebi has notified stricter P-notes norms stipulating a fee of USD 1,000 that will be levied on each instrument to check any misuse for channelising black money.

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