Investments by rich entities abroad through participatory notes (P-Notes) in the Indian markets rose to Rs 1,41,710 crore ($26 billion) in August, the highest level since March, even as funds pumped into equities fell for a consecutive month.
According to latest data released by market regulator Securities and Exchange Board of India (Sebi), P-Note investments in Indian markets (equity, debt and derivatives) have reached the highest level since March, when the cumulative value of their investments stood at Rs 1,65,832 crore.
P-Notes, mostly used by high net worth individuals (HNIs) abroad, hedge funds and other foreign institutions, allow them to put money into Indian markets through already registered FIIs, while saving on time and costs associated with direct registration.
The surge in investment appears to be largely into the derivatives segment, although equities account for more than half of the funds pumped in by P-Note investors into Indian markets.
The quantum of FII investments through these P-Notes also rose to 12.7 per cent, up from 11.8 per cent in the previous month, the highest since 15 per cent in March this year.
