Foreign investors raise $32 billion in P-notes in October to bet on Indian stocks
17 Dec 2012
Foreign investors raised $32 billion (around Rs1,75,829 crore) in participatory notes (P-notes) in October this year, to increase their exposure to Indian stocks, without actually investing in them.
The total value of P-notes used for investments in Indian markets (including equity, debt and derivatives) rose to $32 billion (Rs1,75,829 crore) at the end of October 2012, according to data available with the Securities and Exchange Board of India (SEBI).
This is the highest level of P-notes issuance since February 2012, when cumulative value of such investments stood at $ 33.43 billion (Rs183,151 crore), SEBI data showed.
Investments through P-notes accounted for 14.4 per cent of FII assets under custody of Rs12,21,900 in October, as per the latest data.
The total value of P-notes excluding exposure to equity derivatives, at Rs95,536 crore (7.8 per cent of total FII assets), was also the highest since February, according to the SEBI data.
High net worth individuals (HNIs) hedge funds and other foreign investors use P-notes to invest in Indian markets through registered foreign financial institutions (FIIs).