P-notes investment drops to US $31 billion in April
P-notes investment drops to US $31 billion in April
New Delhi: Investments into Indian shares through participatory notes (P-notes), a preferred route for high networth individuals (HNIs) and hedge funds from abroad, slipped to Rs.1.87 lakh crore (over $31 billion) in April.
According to the latest data released by market regulator Securities and Exchange Board of India (Sebi), the total value of P-notes investment in Indian markets (equity, debt and derivatives) declined to Rs.1,87,486 crore at the end of April after hitting nearly a three-year high of Rs.2,07,639 crore in the preceding month.
P-notes, mostly used by overseas HNIs, hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors (FIIs), while saving on time and costs associated with direct registrations. Besides, the value of P-Notes issued with derivatives as underlying, stood at Rs.1.27 lakh crore at the end of 30 April.
However, investment into equity market through P-notes have been rising in the past few months and analysts attribute the surge to hopes of a stable government at the Centre as well as stability in the value of the rupee against the US dollar.
The quantum of FII investments through P-notes dropped to 11.7% in April from 13% in the last month. Till a few years ago, P-notes used to account for more than 50% of the total FII investments, but their share has fallen after Sebi tightened the disclosure norms and other regulations for such investments.
P-notes have been accounting for mostly 15-20% of the total FII holdings in India since 2009, while it used to be much higher, in the range of 25-40%, in 2008. It was as high as over 50% at the peak of the Indian stock market bull run for a few months in 2007.
FIIs, the key drivers of Indian markets, pumped in a net amount of Rs.9,602 crore ($1.6 billion) in the domestic equity market last month. On the other hand, they pulled out a net Rs.9,185 crore ($1.52 billion) from the debt market in April.
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New Delhi: Investments into Indian shares through participatory notes (P-notes), a preferred route for high networth individuals (HNIs) and hedge funds from abroad, slipped to Rs.1.87 lakh crore (over $31 billion) in April.
According to the latest data released by market regulator Securities and Exchange Board of India (Sebi), the total value of P-notes investment in Indian markets (equity, debt and derivatives) declined to Rs.1,87,486 crore at the end of April after hitting nearly a three-year high of Rs.2,07,639 crore in the preceding month.
P-notes, mostly used by overseas HNIs, hedge funds and other foreign institutions, allow them to invest in Indian markets through registered Foreign Institutional Investors (FIIs), while saving on time and costs associated with direct registrations. Besides, the value of P-Notes issued with derivatives as underlying, stood at Rs.1.27 lakh crore at the end of 30 April.
However, investment into equity market through P-notes have been rising in the past few months and analysts attribute the surge to hopes of a stable government at the Centre as well as stability in the value of the rupee against the US dollar.
The quantum of FII investments through P-notes dropped to 11.7% in April from 13% in the last month. Till a few years ago, P-notes used to account for more than 50% of the total FII investments, but their share has fallen after Sebi tightened the disclosure norms and other regulations for such investments.
P-notes have been accounting for mostly 15-20% of the total FII holdings in India since 2009, while it used to be much higher, in the range of 25-40%, in 2008. It was as high as over 50% at the peak of the Indian stock market bull run for a few months in 2007.
FIIs, the key drivers of Indian markets, pumped in a net amount of Rs.9,602 crore ($1.6 billion) in the domestic equity market last month. On the other hand, they pulled out a net Rs.9,185 crore ($1.52 billion) from the debt market in April.
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