Increasing investment in the Indian capital market through Participatory Notes (P-Notes) 89,143 crore by February-end, experts say, adding that the positive trend is likely to continue in the coming months, on strong corporate earnings expectations by India Inc that will excite foreign investors.
P-notes are issued by Registered Foreign Portfolio Investors (FPIs) to foreign investors who wish to be a part of the Indian stock market without registering themselves directly. However, they will have to go through a due diligence process.
According to the Securities and Exchange Board of India (SEBI) data, the value of P-note investments in Indian markets – equity, debt and hybrid securities – was 89,143 crore by the end of February, as compared to 87,989 crore at the end of January.
At the end of December 2021, the level of investment was 95,501 crore.
out of total 89,143 crore investment through the route by February 2022, 79,747 crore was invested in equity. 9,224 crore in debt, and 172 crore in hybrid securities.
Sonam Srivastava, Founder, Right Research, said February has seen a slight rebound from foreign investors as compared to January. Perhaps isolated global economic factors and the Russia-Ukraine conflict have put additional pressure on already troubled global investors.
In addition, the Federal Reserve’s decision to hike interest rates gives global investors a good and safe opportunity to consider investing in US Treasury bills, she said.
“Corporate Inc. earnings are expected to post strong growth numbers in the upcoming quarters which will create a sense of confidence amongst foreign investors. Also, the China 1 sentiment will benefit the Indian manufacturing sector. Thus, in the next few months we Expect PN to grow at 1.5-2 per cent every month.”
Divam Sharma, founder, SEBI-registered portfolio management services provider Green Portfolio, said the past few months have seen huge equity outflows from FPIs. The total outflow is still around 4-5 per cent of the total FPI investment in India.
According to him, despite inflation and commodity-related disruptions globally, India’s GDP growth projections still look strong.
“We believe that FPI selling in Indian equities will stop now and then we should see fresh growth in FPI AUM given the strong fundamentals of the Indian economy,” Sharma said.
Unlike P-notes investments, assets in the custody of FPIs have declined 49.75 lakh crore at the end of February 52.12 lakh crore at the end of January. PTI SP SP ABM ABM
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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