Investments through participatory notes (P-Notes) have jumped to the highest level in three months in February to Rs 1.73 lakh crore – a sign that Indian markets have emerged as a preferred hotspot for foreign funds to ride the pre-poll bull run.
P-notes are offshore derivative instruments and are popular among hedge funds and high networth individuals. These enable earning returns on investment in the Indian market without undergoing significant cost and time implications of directly investing in India as these are routed through foreign institutional investors (FIIs).
According to data released by the Securities and Exchange Board of India (Sebi), the total value of P-Note investments in Indian markets (equity, debt and derivatives) rose to Rs 1,72,738 crore at the end of February from Rs 1,63,348 crore in the previous month. This was the highest level since December 2013, when the cumulative value of such investments stood at Rs 1,67,566 crore.