Breaking News

You are here » Indian-Commodity  :  Economy  :  P-notes investment declines to over 9-year low of Rs 80,341 crore at July-end

17-Aug2018

P-notes investment declines to over 9-year low of Rs 80,341 crore at July-end

Continuing declining trend, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) has declined to over nine-year low of Rs 80,341 crore at the end of July, amid stringent norms put in place by the watchdog Securities and Exchange Board of India (SEBI) to check misuse of these instruments. This is the lowest level since April 2009 when the cumulative value of such investments stood at Rs 72,314 crore. According to SEBI data, total value of P-note investments in Indian markets including equity, debt and derivatives, at July end dropped to Rs 80,341 crore from Rs 83,688 crore at the end of June. Prior to that, in May the figure was Rs 93,497 crore.

Of the total, P-note holdings in equities at July-end were at Rs 60,550 crore, while in debts and derivatives were at Rs 16,219 crore and Rs 3,572 crore respectively. The quantum of FPI investments via P-notes slumped to 2.4 percent during the period under review from 2.6 percent in the preceding month. 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 due diligence process.

The decline could be attributed to several measures taken by the market watchdog to stop the misuse of the controversy-ridden participatory notes. In July 2017, SEBI had notified stricter norms stipulating a fee of $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes. These measures were an outcome of a slew of other steps taken by the regulator in the recent past. In April last year, the SEBI had barred resident Indians, NRIs and entities owned by them from making investment through P-notes.


Related News

View all news

CPI inflation hits 6-month high of 2.92% in April

India's retail inflation based on Consumer Price Index (CPI) continued northward journey for third straight month and inched up to a 6-month high of 2.92% in April 2019 due to a spike in food prices, including......

Indian economy to grow at 7% range in current fiscal: Subramanian

Chief Economic Advisor (CEA) Krishnamurthy V. Subramanian has said  that the Indian economy would grow at 7% range in the current financial year (FY20) powered by the effects of the strong structural......

Banks take 57% haircut in 94 cases resolved in FY19: ASSOCHAM-CRISIL study

A joint study carried out by the industry body Associated Chambers of Commerce & Industry of India (ASSOCHAM) and rating agency CRISIL stated that banks have taken a huge 57% haircut in the 94......

Top News

View all news

SRF, NIIT Technologies and United Bank of India to see some action today

SRF has entered into a definitive agreement to sell its Engineering Plastics Business to DSM, the Life Sciences and Materials Sciences Company in an all-cash transaction, amounting to Rs 320 crore. The......

NIIT Technologies concludes sale of 88.99% stake in ESRI India Technologies

NIIT Technologies has concluded the sale of 88.99% equity shares in ESRI India Technologies, India to Environment Systems Research Institute Inc., USA. Consequent to above sale, ESRI India Technologies,......

United Bank of India to raise Rs 1,500 crore by various means

United Bank of India has received approval to raise equity capital not exceeding Rs 1,500 crore in one or more tranches during the financial year by way of Qualified Institutions Placement, Public Issue,......