Foreign investments into Indian markets through Participatory Notes (P-Notes), surged to its highest level in three months at around Rs 1.73 lakh crore in February, as compared to Rs 1.63 lakh crore in the previous month.
Investments into Indian markets (equity, debt and derivatives) via P-Notes have been rising over the past few months mainly on hopes of a stable government after general election starting next month. Further, the macro-economic factors like moderation in India’s current account deficit as well as easing inflation can also be attributed for increase in foreign investments in the country.Investment through P-Notes have been accounting for around 15-20 percent of the total FII holdings in India since 2009. Earlier, in 2008, 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 P-Notes investments.
During February 2014, FIIs, the key drivers of Indian markets, have pumped in around Rs 1,400 crore in the Indian equity market and Rs 11,337 crore in the debt market. Increasing foreign investment in the country has also brought stability in the rupee value against the dollar.
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