World
To avoid hostile takeovers amid COVID-19, India mandates approvals on Chinese investments
Manish Singh
Some of India's biggest startups including financial services firm Paytm, e-commerce giant Flipkart, social media operator ShareChat, and food delivery firm Zomato are backed by Chinese VCs.
HDFC, India's biggest bank, said earlier this month that Bank of China had raised its stake in the mortgage lender by over 1%.
Rahul Gandhi, the former head of political party Indian Nation Congress, urged the ruling government earlier this month to take measures to prevent "foreign interests from taking control of any Indian corporate at this time of national crisis."
The revision in policy comes at a time when major investors in India have cautioned local startups to prepare for a tough period ahead. Earlier this month, they told startup founders that raising fresh capital is likely be more challenging than ever for the next few months.
Recent data from research firm Tracxn showed that Indian startups have already started to face the pressure.
Local startups participated in 79 deals to raise $496 million in March, down from $2.86 billion that they raised across 104 deals in February and $1.24 billion they raised from 93 deals in January this year, according to Tracxn. In March last year, Indian startups had raised $2.1 billion across 153 deals, the firm said.
India ordered a nationwide lockdown last month in a bid to curtail the spread of the coronavirus disease. But the move, as in other markets, has come at a cost. Millions of businesses and startups are facing severe disruptions.
Late last month, more than 100 prominent startups, VC funds, and industry bodies requested New Delhi to provide them with a relief fund to combat the disruption.
HDFC, India's biggest bank, said earlier this month that Bank of China had raised its stake in the mortgage lender by over 1%.
Rahul Gandhi, the former head of political party Indian Nation Congress, urged the ruling government earlier this month to take measures to prevent "foreign interests from taking control of any Indian corporate at this time of national crisis."
The revision in policy comes at a time when major investors in India have cautioned local startups to prepare for a tough period ahead. Earlier this month, they told startup founders that raising fresh capital is likely be more challenging than ever for the next few months.
Recent data from research firm Tracxn showed that Indian startups have already started to face the pressure.
Local startups participated in 79 deals to raise $496 million in March, down from $2.86 billion that they raised across 104 deals in February and $1.24 billion they raised from 93 deals in January this year, according to Tracxn. In March last year, Indian startups had raised $2.1 billion across 153 deals, the firm said.
India ordered a nationwide lockdown last month in a bid to curtail the spread of the coronavirus disease. But the move, as in other markets, has come at a cost. Millions of businesses and startups are facing severe disruptions.
Late last month, more than 100 prominent startups, VC funds, and industry bodies requested New Delhi to provide them with a relief fund to combat the disruption.
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