P-note investments continue downtrend in December, plunge 12 per cent

The participatory notes-based investments in the Indian securities market continued their downtrend last month, plunging by 12.43 per cent to Rs 1.57 lakh crore from Rs 1.79 lakh crore reported for November, 2016.

According to the data furnished by the securities market regulator Sebi, December's P-notes tally was the lowest investment level made through the investment instrument since July, 2013.

In July, 2013 the total investment value through P-notes stood at Rs 148,188 crore.

The Sebi data disclosed that out of the total P-notes-based investment Rs 100,927 crore came into the equities, followed by Rs 45,063 crore in derivatives and Rs 11,315 crore were put into the debt instruments.

The participatory notes or P-notes are mostly used by overseas individual investors, hedge funds and foreign institutions to invest in the Indian securities markets through registered foreign institutional investors (FIIs).

The investment instrument constitutes a major portion of the total FIIs' investments into the key domestic indices.

The instrument has been associated with 'round-tripping' of domestic 'black money' back into the Indian economy.

Lately, securities markets regulator Sebi has announced stringent norms for the use of P-notes. It has made it mandatory for all P-note users to follow anti-money laundering law and report any suspected breach immediately.