Less than three weeks after the curbs on participatory notes, overseas investors are rushing to invest in the booming Indian stock markets directly by applying for Foreign Institutional Investor licences.
Nearly 50 applications for FII registrations, including from Morgan Stanley, Citigroup, Bank of America, CLSA and hedge fund DE Shaw, have been cleared since October 16 when the curbs on P-notes, derivatives that allowed foreign investors to trade on the Indian markets, were imposed by the Securities and Exchange Board of India.
Twenty of the new registrations are for conversion of sub-accounts by the big Wall Street firms into FIIs, said sources.
The other top names that have been granted full-fledged licences include Credit Agricole Funds, Prudential Investments, SocGen International ,Crosby Asset Management (HongKong), ING Life Ltd, Man Investment Ltd and State Street Global Advisors.
Several top firms that have chosen to come through the Mauritius route are Morgan Stanley Investments (Mauritius), Bank of America Singapore Ltd, Citigroup Global Markets Mauritius Pvt Ltd, CLSA (Mauritius) Ltd.
According to the Sebi Web site, there are 1,147 FIIs as on November 12 and 3,482 sub-accounts of FIIs. Before the P-note curbs, there were 1,113 FIIs and 3,445 sub-accounts.
The latest numbers do not reflect the conversion of 20 sub-accounts into FIIs.
"Earlier it would take three to four months for registration, but after the P-note announcement, the Sebi machinery is processing every application quite expeditiously," said Akil Hirani, managing partner, Majmudar & Co International Lawyers.
Applications that are complete are now cleared in four weeks, he said.