Foreign investments into Indian markets through participatory notes (P-Notes), a preferred route for HNIs and hedge funds, rose moderately to Rs 1.64 lakh crore (over USD 30 billion) in February.
Siddharth Shah of Nishith Desai Associates is positive about the clarifications that the FM has given on the P- Note. He feels it offers some respite for the market and only the issue of FII remains to be seen.
Ketan Dalal, Joint Tax Leader, PwC and Aliff Fazelbhoy, Partner - Tax, M&A and Employment, ALMT Legal think that the FM’s clarification that there will not be double taxation of both the FIIs and the P-Note holder. But it still remain unclear on the extent and the geographical limit of taxing the FIIs.
Market men say Sebi held a concall with some of these structured product sellers, but didn't offer any comments. CNBC-TV18's Latha Venkatesh reports.
It was a story of flip-flops, says Udayan Mukherjee, managing editor of CNBC-TV18, summerising the market movement for the day.
The BSE Sensex showed smart recovery on Tuesday after CNBC-TV18, citing unnamed finance ministry officials, reported the government would not target the participatory notes under its newly proposed General Anti-Avoidance Rule (GAAR).
Despite fairly tight liquidity conditions in the last couple of months, there have not been too many instances of mid and small cap companies borrowing money by pledging shares with non-banking financial companies (NBFCs).
The price pattern in many stocks indicate that some foreign players are borrowing shares held in participatory note accounts, dumping those shares, and then buying them back at lower levels.