You are here: Home » Markets » News
Business Standard

P-notes investment declines from Rs 1.31 trn to Rs 1.28 trn in November

P-notes are issued by registered foreign portfolio investors to overseas players who wish to invest in the Indian capital market without registering themselves directly

Press Trust of India  |  New Delhi 

P-notes investment declines to Rs 1.28 trn from Rs 1.31 trn in Nov

Overall investments in the Indian capital market through (P-notes) fell to Rs 1.28 trillion at November-end after witnessing a rise in the previous month.

are issued by registered foreign portfolio investors to overseas players who wish to invest in the Indian capital market without registering themselves directly. They, however, need to go through due diligence.

Total value of investment in Indian — equity, debt and derivatives — declined to Rs 1.28 trillion at November-end from Rs 1.31 trillion at the end of October, according to market regulator data.

P-note investments were on a decline since June and hit an over eight-year low in September; however, it climbed up in October. This decline was in view of stringent norms put in place by the Securities and Exchange Board of India (Sebi).

Of the total investments in November, P-note holdings in equities were at Rs 928.46 billion and the remaining in debt and derivatives

Besides, the quantum of via dipped to 4 per cent, during the period under review, from 4.1 per cent in the preceding month.

Over the past few months, has taken several measures to stop the misuse of the controversy-ridden In July, the regulator notified stricter P- notes norms stipulating a fee of $1,000 that would be levied on each instrument to check any misuse of channelising

Also, prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes.

The move was a follow-through of Sebi's board approval of a relevant proposal in June. These measures were an outcome of a slew of other steps taken by the regulator in the recent past.

In April, Sebi had barred resident Indians, NRIs and entities owned by them from making investment through P-notes. The decision was part of efforts to strengthen the regulatory framework for P-notes, which have been long seen as being possibly misused for routing from abroad.

First Published: Sun, January 14 2018. 12:49 IST
RECOMMENDED FOR YOU