New Delhi, Jun 23 (PTI) Investment through Participatory Notes (P-Notes) in the Indian capital market declined on a monthly basis to Rs 86,706 crore in May 2022.

Experts say that foreign institutional investors will change their selling stance and buy back in the country’s stocks in the coming one or two quarters.

P-notes are issued by Registered Foreign Portfolio Investors (FPIs) to foreign investors who wish to invest in the Indian stock market without registration. However, for this they have to go through a whole process of investigation.

According to the Securities and Exchange Board of India (SEBI) data, the value of investments through P-notes in domestic markets stood at Rs 86,706 crore at the end of May, 2022 from Rs 90,580 crore in April.

At the same time, in March 2022 it was Rs 87,979 crore while in February and January it was Rs 89,143 and 87,989 crore respectively.

According to the data, out of total P-note investments of Rs 86,706 crore in May, Rs 77,402 crore was invested in equities, Rs 9,209 crore in bonds and Rs 101 crore in ‘hybrid’ securities.

At the same time, Rs 81,571 crore was invested in shares and Rs 8,889 crore in bonds at the end of April.

Divam Sharma, Founder, Green Portfolio, a portfolio management services company, said, “The stock market has become attractive in value terms in the current times. Supply chain and inflation will ease in the coming months.

“Markets often move ahead of the economic growth cycle and we expect foreign investors to take a back buying stance in the domestic markets in the coming quarter or two,” he said.

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Assets under FPIs declined by five per cent to Rs 48.23 lakh crore at the end of May as compared to P-notes. It was Rs 50.74 lakh crore at the end of April.

Meanwhile, foreign investors pulled out Rs 40,000 crore from domestic stock markets and Rs 5,505 crore from bond markets during May.

Fears of a rate hike by the US Federal Reserve weighed on foreign investor sentiment. This is the eighth consecutive month that FPIs have made net outflows from Indian markets.


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