The Rise and Fall of Participatory Notes in the Indian Stock Market

Participatory Notes (P-notes) have been at the forefront of discussions due to their potential impact on the market. P-notes allow foreign investors to invest anonymously in Indian stocks through registered entities or banks. Kethan Parekh's infamous scam in 2001 exposed the misuse of P-notes to artificially inflate stock prices. While initially introduced to encourage foreign investments in India, P-notes have been misused by some investors for illegal activities such as tax evasion and money laundering.