Participatory Notes Investment Surges to Rs 1.49 Lakh Cr in March

New Delhi, Jun 26 (PTI) Investments through participatory notes in the Indian capital markets rose to Rs 1.49 lakh crore at the end of March from the previous year's level driven by a strong domestic macroeconomic outlook.

The latest data includes the value of P-note investments in Indian equity, debt, and hybrid securities.

Participatory notes (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 the latest data from markets regulator Sebi, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- stood at Rs 1,49,120 crore at the end of March 2024, way higher than Rs 88,600 crore in March-end 2023.

On a month-on-month basis, the investment number slightly slipped from Rs 1,49,517 crore at the end of February.

The growth in P-notes generally aligns with the trend in FPI flows. When there is a global risk to the environment, investment through this route increases, and vice-versa.

Market experts said that the influx in March can be attributed to positive economic growth. India's economic growth accelerated to 8.4 per cent in the third quarter of 2023-24, mainly due to good performance by the manufacturing, mining & quarrying and construction sectors.

Of the total Rs 1.49 lakh crore invested through this route till March 2024, Rs 1.28 lakh crore was invested in equities, Rs 20,806 crore in debt, and Rs 346 crore in hybrid securities.

In addition, assets under custody of the FPIs grew to Rs 69.54 lakh crore in March-end 2024 from Rs 48.71 lakh crore a year earlier.

Meanwhile, FPIs invested a net sum of Rs 35,000 crore in Indian equities and Rs 13,602 crore in the debt market in March this year.