Assets under custody of overseas investors in the Indian stock market, including those held through participatory notes, has fallen to an eight-month low of Rs 12.93 lakh crore ($206 billion).
According to the latest data released by the Securities and Exchange Board of India, the total assets under custody of foreign institutional investors in Indian equities declined by about Rs 44,000 crore (Rs 440 billion) to Rs 12.93 lakh crore as on July 31, 2013.
This is the lowest level of AUC of FIIs since December 2012, when they held Rs 13.35 lakh crore (Rs 13.35 trillion).
Overall, FIIs' exposure to Indian equities through the participatory notes (P-notes) route soared to Rs 1.48 lakh crore (Rs 1.48 trillion) in July after hitting an 11-month low of Rs 1.47 lakh crore (rs 1.47 trillion) in June.
P-Notes, mostly used by overseas high networth individuals, hedge funds and other foreign institutions, allow them to invest in Indian markets through registered FIIs, while saving on time and costs associated with direct registrations.
However, the value of P-Notes issued with derivatives as underlying, declined to Rs 94,814 crore (Rs 948.14 billion) at July-end from Rs 99,763 crore (Rs 997.63 billion)