New Delhi: Investments into Indian shares through participatory notes (P-Notes), a preferred route for HNIs and hedge funds from abroad, surged to the highest level in three months at around Rs 1.73 lakh crore (about USD 28 billion) in February.

According to the latest 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 preceding month.

This was the highest level since December 2013, when the cumulative value of such investments stood at Rs 1,67,566 crore.

P-Notes, 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 registrations.

According to market analysts, investment into equity market via P-Notes have been rising in the past few months mainly on hopes of a stable government after general elections starting next month.

“It can also be attributed to moderation in our current account deficit as well as stability in the rupee value against the US dollar,” an analyst said.

Besides, the value of P-Notes issued with derivatives as underlying, stood at Rs 1.13 lakh crore as on February 28, 2014.

The quantum of FII investments through P-Notes grew 11.7 percent in February from 11.5 percent in the previous month.

Till a few years ago, P-Notes used to account for more than 50 percent of the total FII investments, but their share has fallen after Sebi tightened the disclosure norms and other regulations for such investments.

Source: Zeenews.com

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