Foreign investments in the Indian markets through P-notes or PNs (Participatory Notes) increased to 8-month high of around 1.75 lakh crore Rupees or 32 billion dollar in October 2012. This happened because different reform measures attracted the overseas investors towards the Indian markets.
Market regulator SEBI (Securities and Exchange Board of India) revealed in its data that the overall value of P-Note investments in India (debt, equity or derivatives) by October 2012 end increased to highest since February 2012, when the total value of investments like these were 1.83 lakh crore Rupees.
Apart from this, the overall value of P-notes issued with the derivatives as basics stood at 95536 crore Rupees by October 2012 end.
What are P-Notes or PNs?
P-Notes or PNs or Participatory Notes are used by the HNIs or High Networth Individuals, foreign institutions as well as hedge funds. P-Notes allow them to invest their money in Indian markets via registered FIIs or Foreign Institutional Investors. This saves them cost as well as time related to direct registrations.
So basically, PNs are the tools or instruments which are issued by the registered FIIs to the overseas investors who are willing to invest in stock market of India without registering with market regulator SEBI.