• Driven by stable macroeconomic fundamentals, investment in the Indian capital markets through participatory notes rose to Rs 1.13 lakh crore in June-end, making it the highest level in five-and-half years.

About Participatory notes

• P-notes are offshore derivative instruments with Indian shares as the underlying assets.

FPIs are non-residents who invest in Indian securities like shares, government bonds, corporate bonds, etc.

• Participatory notes (P-notes) are issued by registered Foreign Portfolio Investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly.
  • They, however, need to go through a due diligence process by SEBI.
• The anonymity provided by the P- Notes makes it lucrative for entities that try to use this route to round trip funds.