NEW DELHI: Investment in the Indian capital markets through participatory notes rose to close to a six-year high at Rs 1.23 trillion in July-end, making it the fifth consecutive monthly increase, on the back of stable macroeconomic fundamentals.

The amount has reached the highest level since December 2017 -- when investment through the route stood at Rs 1.25 trillion, data with the Securities and Exchange Board of India (Sebi) showed.

The latest data includes the value of P-note investments in Indian equity, debt, and hybrid securities.

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.

According to Sebi data, the value of P-note investments in Indian markets - equity, debt, and hybrid securities - stood at Rs 1,22,805 crore at the end of July as compared to 1,13,291 a month earlier.

In comparison, investment through the route was Rs 1,04,585 crore in May-end, Rs 95,911 crore in April-end, Rs 88,600 crore in March-end, Rs 88,398 crore in February-end and Rs 91,469 crore in January-end.

The growth in P-notes generally aligns with the trend in FPI flows. When there is a global risk to the environment, investment through this route increases, and vice-versa.