CHAPTER III

TRENDS AND
PERFORMANCE OF FII’s
TRENDS IN INDIA
 3.1 TRENDS IN INDIA

 Portfolio investments in India include

investments in American Depository Receipts
(ADRs)/ Global Depository Receipts (GDRs),
Foreign Institutional Investments and
investments in offshore funds
 Before 1992, only Non-Resident Indians
(NRIs) and Overseas Corporate Bodies were
allowed to undertake portfolio investments in
India.
 Thereafter, the Indian stock markets were
opened up for direct participation by FIIs.
 FIIs invested US$ 9923 million in equities
between Jan1 and July 31, 2010, and US$
7649.98 million in debt between the same
period.
 India accounted for more than one-fifth of the
US$ 22.1 billion private equity (PE) investments
received by the emerging markets across the
globe in 2009.
 PE and venture capital (VC) investments are
projected to reach US$ 17 billion (around Rs
80,000 crore) in 2010.
 Sensex rising by nearly 140 points to a fresh 32-
month high as FIIs continued to bet big on India
PARTICIPATORY NOTES
 3.2 PARTICIPATORY NOTES
 Participatory notes (PNs / P-Notes) are
instruments used by investors that are not
registered with the SEBI (Securities & Exchange
Board of India) to invest in Indian securities.
 Participatory notes are instruments that derive
their value from an underlying financial
instrument such as an equity share and, hence,
the word, 'derivative instruments'.
 SEBI permitted FIIs to register and participate in
the Indian stock market in 1992.
 Participatory notes are used outside India for
making investments in shares listed in that
country. That is why they are also called
offshore derivative instruments.