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Investment through participatory notes (P-notes) in the domestic capital market declined to Rs 75,725 crore at the end of July, the lowest level in nearly two years, mainly in the wake of aggressive rate hikes by the US Fed. This also marks the third consecutive monthly decline in investment numbers.

According to Securities and Exchange Board of India (Sebi) data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- stood at Rs 75,725 crore at July-end compared to 20-month low of Rs 80,092 crore at June-end.  This was the lowest level since October 2020, when investment through the route was at Rs 78,686 crore. Of the total Rs 75,725 crore invested through the route till July 2022, Rs 66,050 crore was invested in equities, Rs 9,592 crore in debt, and Rs 82 crore in hybrid securities. In comparison, Rs 70,644 crore was invested in equities and Rs 9,355 crore in debt during June this year.

Participatory notes (P-notes) are issued by registered Foreign Portfolio Investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly.They, however, need to go through a due diligence process.