Investments via P-notes drop to Rs 94,826 crore in November

Investments in Indian capital market through participatory notes (P-notes) dropped to Rs 94,826 crore till November-end after hitting 43-month high in the preceding month.

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.

According to Securities and Exchange Board of India data, the value of P-note investments in Indian markets — equity, debt and hybrid securities — was at Rs 94,826 crore by November end as compared to Rs 1,02,553 crore by October end.

The month of October saw the highest level since March 2018, when P-notes had invested to the tune of Rs 1,06,403 crore. Abhay Agarwal, Founder and Fund Manager, Piper Serica, a Sebi-registered PMS, said there was a net sale of more than Rs 8,000 crore in November in the equity segment by P-note holders reversing the October inflow of more than Rs 5,000 crore.

This is consistent with the FPI sales that have been seen in the current quarter to lock-in their gains for the year.

“We expect to see a negative number in the month of December also. There was a marginal net inflow in the debt segment, but the number is too small to read much into,” he added.