Chinese investors bet big on India, internet giants pour funds into digital startups - Times of India

Chinese investors bet big on India, internet giants pour funds into digital startups - Times of India: ""Chinese internet companies have recognized the big potential in India's digital startups where there are similarities in learning curves and experiences," Frank Hancock, managing director, advisory, Barclays said. He pointed out that the broader FDI investments have pivoted towards the east with Japan competing with the US and the UK among the top three sources of capital. "In that context, the incremental Chinese private investments are important from a signaling perspective," Hancock said.
A recent Credit Suisse report highlighted that India's internet and e-commerce journey bears close similarity with that of China, with a lag of 8-10 years. "The presence of such investors on the boards of investee companies enables access to insightful market advice and winning business models," said Anup Vikal, CFO, Snapdeal, which has attracted investments from Alibaba, Taiwan's Foxconn and Japanese telecoms & internet giant Softbank.
Besides the strategic investors, Hillhouse Capital, one of the largest China-based investment funds, picked up a stake in online classifieds player Cardekho last year, and took positions in the domestic public markets. More significant, though little known, are the investments by State Administration of Foreign Exchange (SAFE), a fully-owned subsidiary of People's Bank of China, in some of India's pedigree large cap stocks. SAFE, entrusted with managing China's estimated $3.5 trillion foreign reserves, started taking positions in Indian public equities at least two quarters back, several top bankers in Mumbai said in recent conversations.
Between January 1, 2015 and January 22 this year, investors from Asia chose 48 Indian startups to provide financial backing. The 22 companies, from countries including Japan, China, South Korea, Taiwan, Singapore and Malaysia, participated in funding rounds worth $3.4 billion in this period. Chinese companies Alibaba, Tencent, Ctrip, Didi Kuaidi, Hillhouse Capital and Tybourne (Hong Kong) were significant investors.
Most of China's cash reserves are said to be invested in dollar and euro denominated assets though it has started taking risk exposures in other geographies as well. While Chinese investor interest around Indian internet startups has gathered momentum, it is yet to translate into other sectors which the dragon has eyed for some years now.
Take, for instance, Fosun, arguably, the largest Chinese private conglomerate and the most active overseas acquirer. Fosun -- with interests spanning from pharma to real estate to internet -- started scouting for investments in India more than two years ago but hasn't struck any deals yet.
This is where some bankers forsee "the mutual dislike" between Indian and Chinese businesses, which are rooted in cultural differences and historical prejudices. "Private businesses in the two countries vary vastly, and love to look down upon each other," a senior banker said on condition of anonymity. Then there are whispers about India preferring neutral money from Japan and Canada to build its infrastructure."



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