NEW DELHI: Investments made using participatory notes (P-notes) in India’s bourses rose to Rs 57,000 crore as of April this year. This rise happened after such investments fell to a 15-year low at the end of March.P-notes are issued by registered Foreign Portfolio Investors (FPIs) to those overseas investors who wish to participate in the equity or debt markets without registering themselves directly.
The value of P-note investments in Indian capital markets — equity, debt, hybrid securities and derivatives — stood at Rs 57,100 crore in April, while it was at Rs 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 Indian markets stood at Rs 44,586 crore.
The lower figure was a direct result of uncertainty in the capital markets over the impact of coronavirus on India’s economy and was in line with trends in the global markets.Several rating agencies have forecast India’s GDP to shrink by near 5 per cent this year.
SEBI data showed that of the total Rs 57,100 crore invested through the P-notes route till April, Rs 46,165 crore was invested in equities, Rs 10,619 crore in debt, Rs 177 crore in the derivatives segment and Rs 139 crore in hybrid securities.
Analysts said that India was not the only market impacted by FPIs pulling out. “Most FPIs including P-note holders moved their investment out of our shores in reaction to fears over the virus impact,” said Amit Banerjee, an independent merchant banker specialising in East Asian funds.
Fund inflow through the route stood at Rs 68,862 crore, Rs 67,281 crore and Rs 64,537 crore at the end of February 2020, January 2020 and December 2019, respectively. However, it was at Rs 69,670 crore at November-end last year.