Reuters Market Eye - The total value of participatory notes into Indian equity and debt, including derivatives, rose to 176 trillion rupees in October, its highest since February, according to Securities and Exchange Board of India (SEBI) data.
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The rise in investments via P-notes marks a significant recovery from the fiscal 2012-13 year-low in May when the value fell to 1.29 trillion amid worries the government was looking to tax foreign investors under the General Anti Avoidance Rule (GAAR).
Participatory notes are offshore instruments issued by foreign institutional investors to overseas investors who want to invest in India without having to directly register with Indian capital markets regulator SEBI.
However, the deferral of the implementation of GAAR, valuations in equities and the governent’s fiscal and economic reforms have revived investments into P-notes.