The foreign portfolio investment (FPI) via participatory notes (P-Notes) hit its lowest in nearly a decade in March 2020 on a month-on-month basis. The investments fell by 30.3 per cent to Rs 48,006 crore as on March 2020, CMIE data showed.
Equity investments fell 29.8 per cent, compared to a fall of 2.2 per cent in the previous month, while debt investments slipped around 33 per cent against 27.9 per cent jump in February, on a month-on-month basis. The derivatives, however, posted a double-digit growth of over 30 per cent over the last two months. The notional value of offshore derivative instruments (ODIs) on equity, debt, hybrid securities & derivatives or the P-notes in the previous two months grew 4.3 per cent and 2.4 per cent, respectively, on a monthly basis.
P-notes are issued by brokers and registered FPIs to overseas investors to invest in the Indian stock market without registering themselves directly after going through a due diligence process.
Assets under the custody of FPIs dipped nearly 25 per cent to around Rs 25 lakh crore by March 2020. FPI assets have been declining for past three months in a row. It declined 5.2 per cent in February and nearly 0.5 per cent in January. Investments in P-Notes as percentage of assets under the custody of FPIs declined to 1.9 per cent in March from two per cent in the previous month. The notional value of ODIs on equity and debt excluding derivatives as percentage of FPI assets stood at 4.6 per cent and has been declining ever since.