Irrespective of the growing border tension between India and China over the past few years, Chinese investors and companies have been increasing their investments in India. In the quarter ended March 31, 2020, foreign portfolio investments from China into Indian listed companies witnessed a sharp rise on account of 1.01 per cent stake purchase by People’s Bank of China in HDFC Limited. Even foreign direct investment from China, Hong Kong and Taiwan has grown over the past six years and incremental FDI from the three destinations amounted to over $5.4 billion.
According to data sourced from nseinfobase.com of Prime Database, while the market value of all FPI investments from China stood at Rs 774 crore at the end of December 2019, it jumped sharply to Rs 3,257 crore as of March 2020.
Chinese investments through foreign portfolio investments have been growing over the last five years. While the value of their holding in listed Indian companies (where the holding is in excess of 1 per cent) had stood at Rs 136 crore as of December 2015, by the end of March 2020 it jumped to Rs 3,257 crore. While the numbers are still very small, there is an increasing trend.
The Indian listed companies where FPIs from China have over 1 per cent stake are — HDFC Ltd (1.1 per cent), Avanti Feeds (8.77 per cent); Kiri Industries (2.29 per cent) and Kingfa Science & Technology (6.32 per cent). Two companies where the holding is less than 1 per cent but information is available are Alembic Pharma (3,250 shares) and Gujarat Industries Power Co (200 shares).
In the last six years the incremental FDI from Hong Kong, China and Taiwan amounted to $5.462 billion, which is over three times the cumulative investment of $1.683 billion from the three destinations between April 2000 and March 2014. It stood at $7.145 billion at the end of March 2020.
While the FDI from Hong Kong till March 2014 amounted to $1.2 billion and that from China amounted to $402 million, it jumped to $4.4 billion and $2.378 billion respectively, by the end of March 2020. That from Taiwan jumped from a $66 million till march 2014 to $360 million at the end of March 2020.
Of the 30 unicorns — startups worth at least $1 billion — in the country, more than half have major investments from Chinese firms. Notably, 12 of these unicorns count marquee investors Alibaba and Tencent among their backers. These include some companies at the top of their respective sectors such as Zomato, Paytm, Byjus, Ola Cabs, BigBasket, etc
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