P-Notes investment hits 2 years record low of Rs 2.1 lakh crore

Investments into Indian capital markets through participatory notes (P-Notes) has slumped to the lowest level from last two years to Rs 2.10 lakh crore at the end of June.

SEBI in May, had tightened norms to check any misuse of controversy-ridden P-Notes by making it mandatory for users of these overseas instruments to follow Indian anti-money laundering law and report any suspicious transactions immediately.

P-Notes are the instruments, that are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to invest in Indian markets without registering themselves directly in India. According to SEBI's data, the total value of P-Notes investment in Indian markets - equity, debt and derivatives - fell to Rs 2,10,731 crore at the end of June, from Rs 2,15,338 crore in May-end.This was the lowest level since July 2014 when the cumulative value of such investments stood at Rs 2,08,284 crore.

The quantum of FII investments via P-Notes has dropped to 8.8 per cent in June from 9.2 per cent in the preceding month.The share of P-Notes has been falling over the years as SEBI has tightened disclosure norms and other related regulations. It used to be much higher at 25-40 per cent in 2008 while the reading was as high as 55 per cent at the peak of the stock market bull run in 2007.