Surge in P-Note Investments Reflects India’s Positive Economic Outlook

Investments through participatory notes in India's capital markets surged to ₹1.49 lakh crore by March 2024, up from ₹88,600 crore the previous year, driven by strong economic growth. The majority of investments were in equities, followed by debt and hybrid securities. Positive economic indicators bolstered investor confidence.

The value of investments through participatory notes in Indian capital markets surged significantly, reaching Rs 1.49 lakh crore by the end of March 2024. This represents a notable increase from the Rs 88,600 crore recorded at the same time the previous year, driven by a robust domestic macroeconomic outlook. The latest report covers P-note investments across equities, debt, and hybrid securities.

Participatory notes, issued by registered foreign portfolio investors (FPIs) to overseas investors looking to engage with the Indian stock market, do not require direct registration but do involve a due diligence process.

According to markets regulator Sebi, P-note investments were split mainly between equities (Rs 1.28 lakh crore), debt (Rs 20,806 crore), and hybrid securities (Rs 346 crore). This growth in P-notes aligns with trends in FPI flows, often increasing with global risk aversion. In March 2024, FPIs also invested Rs 35,000 crore in Indian equities and Rs 13,602 crore in debt, further reflecting the upbeat economic climate characterized by significant performance in the manufacturing, mining & quarrying, and construction sectors.

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