Investments in Indian shares through participatory notes (P-Notes) in July dropped to Rs 2.08 lakh crore (about $34 billion) after hitting over a six-year high in the preceding month. This also marks the first decline since April.
According to Sebi data, the total value of P-Note investments in Indian markets (equity, debt and derivatives) declined to Rs 2,08,284 crore at the end of July from Rs 2,24,248 crore in June, the highest level in more than six years.
The June figure marked the highest investments into Indian shares through P-Notes since May 2008, when the cumulative value of such investments stood at Rs 2,34,933 crore.
P-Notes are mostly used by overseas HNIs (high networth individuals), 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 registration. However, investment in the market via P-Notes had been rising in the past few months and analyst attribute the surge to hopes of investors from a stable government.
It shot up in May after the election results, primarily on the government’s promise to revive growth and the momentum continued in June. However, it slipped in July.