Investments through participatory notes (P-notes) in the domestic capital market surged to ₹62,138 crore till June-end, making it the third consecutive monthly rise.

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, however, need to go through a due diligence process.

According to SEBI data, the value of P-note investments in Indian markets -- equity, debt, hybrid securities and derivatives -- stood at ₹62,138 crore until June, while the same was at ₹60,027 crore at the end of May.

Prior to that, investment level was at ₹ 57,100 crore at the end of April.

The investment level had fallen to an over 15-year-low of ₹48,006 crore at the end of March.

The figure at March-end was the lowest level of investment since October 2004, when the total value of P-note investments in the Indian markets stood at ₹44,586 crore.

The lower figure in March came amid significant volatility in broader markets on concerns over coronavirus-triggered crisis.

Of the total ₹62,138 crore invested through the route till June, Rs 52,171 crore was invested in equities, ₹9,572 crore in debt, ₹ 231 crore in the hybrid securities and ₹164 crore in derivatives segment.

Fund inflow through the route stood at ₹68,862 crore, ₹67,281 crore and ₹64,537 crore at the end of February 2020, January 2020 and December 2019, respectively. However, it was at ₹69,670 crore at November-end last year.

Market experts said that P-note is now not a preferred route for investing in India after Sebi made registration process easier for FPIs. However, due to certain taxation laws in India, FPIs still want to explore this route.

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