P-Note investments rise 6-mth high at Rs 1.68 lakh crore in May

Latest data released by Sebi,total value of P-Note investments in Indian markets rose to 1,68,263 crore.

Written by PTI | New Delhi | Published: June 27, 2013 4:34 pm

Investments into Indian shares through participatory notes (P-Notes),a preferred route for HNIs and hedge funds from abroad,hit six-month high of Rs 1.68 lakh crore (about USD 28 billion) in May.

According to the latest data released by the Securities and Exchange Board of India (Sebi),the total value of P-Note investments in Indian markets (equity,debt and derivatives) rose to 1,68,263 crore at the end of May.

The May figure has reached highest level since November,when the cumulative value of such investments stood at Rs 1.77 lakh crore. At the end of April,foreign investments into Indian markets through P-Notes stood at Rs 1.57 lakh crore.

P-Notes,mostly used by overseas HNIs (High Networth Individuals),hedge funds and other foreign institutions,allow them to invest in Indian markets through registered Foreign Institutional Investors (FIIs),while saving on time and costs associated with direct registrations.

Notably,investments into Indian shares through P-Notes was at Rs 1.77 lakh crore in November and Rs 1.75 lakh crore in October on government’s policy reform measures and initiatives to address tax-related issues. Besides,the value of P-Notes issued with derivatives as underlying,was at Rs 1.11 lakh crore at May-end.

The quantum of FIIs investments through P-Notes increased to 11.69 per cent in May from 11.32 per cent in the previous month. Till a few year-ago,the P-Notes used to account for more than 50 per cent of total FII investments,but their share has fallen after Sebi tightened disclosure and other regulations for such investments.

The PNs have been accounting for mostly 15-20 per cent of total FII holdings in India since 2009,while it used to be much higher,in the range of 25-40 per cent,in 2008. It was as high as over 50 per cent at the peak of Indian stock market bull run during a few months in 2007.

FIIs,the key drivers of Indian markets,pumped in Rs 22,169 crore (around USD 4 billion) in the Indian stock market in May after falling to a 16-month low in April. Additionally,FIIs also infused Rs 5,969 crore (USD 1.13 billion) in the debt market last month.

The executive summary to the CCMP notes that while the status of Rashtrapati Bhavan as a Grade 1 Heritage Building defines the limits of intervention to conserve the building and the site,it also accommodates the highest office of the Government,including the residence of the President.

“This makes it a ‘living heritage’ building which creates genuine needs to cater to its efficient functioning,” it said. The vision guiding the preparation of the CCMP has taken into account the wider context of the Estate and its contemporary functional needs.

As a ‘living’ heritage building the original design and layout has,been modified,because over the years,the functional role of Rashtrapati Bhavan precinct increased tremendously,both in size and complexity. “By and large,however,in the process of incremental development over the years,the integrity of the original design has been respected,which enables the CCMP to make a credible case to conserve what remains,” suggested the plan report.

The CCMA stresses the importance and need for continuous maintenance to conserve the heritage characteristics of Rashtrapati Bhavan precincts. It also highlights the need for a dedicated Heritage Cell in the Central Public Works Department (CPWD).

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