Investment via P-notes drops to 94,826 cr in November

New Delhi: Investments in the Indian capital market through participatory notes (P notes) fell to Rs 94,826 crore through the end of November after peaking at 43 months the previous month.

P-Notes are issued by registered Foreign Portfolio Investors (REITs) to foreign investors who wish to be part of the Indian stock market without registering directly. However, they must go through a due diligence process.

According to data from the Securities and Exchange Board of India, the value of P-note investments in Indian markets – stocks, debt securities and hybrid securities – was Rs 94,826 crore at the end of November, compared to Rs 1,02.553 crore at the end of November. October.

October saw the highest level since March 2018, when P-notes invested Rs 1,06,403 crore.

Abhay Agarwal, Founder and Fund Manager, Piper Serica, a PMS registered by Sebi, said there was a net sale of over Rs 8,000 crore in November in the equity segment by P-note holders reversing the October influx of over Rs 5,000 crore.

This is consistent with the REIT sales that have been seen in the current quarter to lock in their gains for the year.

“We expect to see a negative number in December as well. There has been marginal net inflow into the debt segment, but the number is too small to read,” he added.

At the end of September this year the investment level was 97,751 crore, Rs 97,744 crore at the end of August. The figure for July has been revised to Rs 85,799 crore from Rs 1,01798 crore released earlier.

Prior to that, the investment level was Rs 92,261 crore at the end of June, Rs 89,743 crore at the end of May, Rs 88,447 crore at the end of April and Rs 89,100 crore at the end of March.

Of the total of Rs 94,826 crore invested up to November, Rs 84,915 crore was invested in stocks, Rs 9,605 crore in debt, Rs 306 crore in hybrid securities.

P-note flows have been volatile over the past four months, in line with volatility in global and Indian markets.

Divam Sharma, co-founder of Green Portfolio, a PMS registered by Sebi, said that November 2021 saw a slight change in the price of REIT inflows and that this negative trajectory also continued into December 2021.

The main reasons for the withdrawal of REIT from the stock markets include expectations of monetary tightening on the part of federal banks, high levels of inflation, uncertainty surrounding the spread of the Omicron variant, and higher valuation levels in the markets. fellows, he said.

“This also takes into account the fact that most REITs go on year-end vacations for 2-4 weeks and had lean positions before their vacations. This is a global trend as emerging markets around the world entire as well as developed markets witnessed sales in November and December, “he added.

Assets in REIT custody fell to Rs 52.24 lakh crore at the end of November, from Rs 53.6 lakh crore in

end of October.