It all started with a seemingly innocuous transaction on April 12 when state-owned People’s Bank of China (PBoC) bought an additional 0.2 per cent stake in HDFC Ltd., India’s largest housing finance company. Added to PBoC’s existing 0.8 per cent stake, this took the Chinese bank’s equity past 1 per cent — triggering a notification to stock exchange regulator, the Securities and Exchange Board of India (Sebi).
A registered foreign institutional investor (FII) buying a stake in HDFC is perfectly legal. It was also a smart bargain. Stock markets in the world had been topsy-turvy and till that day HDFC Ltd. had seen 32 per cent erosion in market cap since the market crash triggered by the spread of coronavirus.
Yet, the transaction rang alarm bells at Sebi coming, as it did, amid allegations of Chinese firms exploiting market crash to corner stakes in strategic firms of vulnerable economies. The market regulator played safe and promptly shot off a missive to the finance ministry seeking guidance. It asked if such transactions needed special attention.
In Delhi, its chain reaction continues to unravel till this day. Taking note of the threat posed by Chinese firms to companies in India that may be vulnerable due to economic stagnation because of coronavirus, on April 17, the commerce ministry’s Department for Promotion of Industry and Internal Trade (DPIIT) amended foreign direct investment (FDI) guidelines to apply curbs on investments from China. Aimed at preventing any opportunistic takeover from across the border, any fresh FDI from China now requires a specific nod from the government.
Denne historien er fra May 17, 2020-utgaven av Business Today.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra May 17, 2020-utgaven av Business Today.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Pension Scheme - Safety Net
The move to introduce the UPS has evoked mixed reactions. Analysts believe its funding will have limited impact on the fiscal math
The Reit Choice?
Real Estate Investment Trusts (Reits) Are Gaining Traction As Interest Rates Stabilise. But Returns Could Be Affected By Adverse Economic Conditions And Market Volatility
CORPORATE - Calling to Account
The sudden exit of Byju's auditor BDO marks the latest in a long series of setbacks for the edtech firm
EMPLOYMENT: Skills Push
The skill development ministry plans to partner with the UGC to improve the employability of undergraduates
Building on a Vision
L&T'S CHAIRMAN EMERITUS A. M. NAIK HAS BUILT A MAMMOTH ENTERPRISE THAT IS BUILDING A NEW INDIA, FROM ITS METRO RAIL SYSTEMS TO THE RAM TEMPLE
"KYS more important than KYC"
Vijay Kedia is a renowned equity investor; the value of his listed portfolio stands at around ₹1,750 crore
ROXX STAR
THE THAR ROXX COMBINES LUXURY WITH PERFORMANCE TO MAKE A STRONG STATEMENT IN THE MID-SIZE SUV SEGMENT
HIT THE GROUND RUNNING
Smartwatches have become indispensable tools for runners, offering real-time insights into pace, distance, heart rate, and more. Here are a few you can consider
TURNING THE TABLES
INDIA'S FURNITURE MARKET IS POISED FOR A GLOBAL TAKE-OFF. ALREADY, A HOST OF GLOBAL BRANDS HAVE MADE THE COUNTRY THEIR HOME, BUT INDIAN COMPANIES ARE NOT TOO FAR BEHIND
THE EVOLUTION OF ATHERA
IDENTIFYING OPPORTUNITIES IN ADVANCE HAS STOOD THIS BENGALURU-BASED VC FUND IN GOOD STEAD. NOW, WITH A HEIGHTENED FOCUS ON TECHNOLOGY, IT WANTS TO SUSTAIN THE SUCCESS