P-Note

Driven by stable macroeconomic fundamentals, investment in the Indian capital markets through participatory notes rose to Rs 1.13 lakh crore in June-end, making it the highest level in five-and-half years. This includes the value of P-note investments in Indian equity, debt, and hybrid securities. Also, this marks the fourth consecutive monthly increase in the investment level through this route, data with the Securities and Exchange Board of India (Sebi) showed. Participatory notes (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 a due diligence process. According to Sebi data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- stood at Rs 1,11,291 crore at the end of June as compared to Rs 1,04,585 crore in May-end. In comparison, the investment through the route was Rs 95,911

According to Sebi data, the total value of P-note investments in Indian markets - equity, debt, and derivatives - slumped to a low of Rs 934.97 billion

The quantum of FPI investments via P-notes remain unchanged at 6.6 per cent in March

P-note issuers see the equities' business as dwindling over time due to taxation

P-Notes are issued by registered FPIs to foreign investors who wish to participate in Indian markets

Assocham said GAAR provisions will not apply to an FPI on maturity as there is a need to sustain confidence of global equity investors

After Sebi tightened disclosure norms, share of P-Notes has been falling over the years