Mumbai: Despite ongoing geopolitical tensions between India and China, the People’s Bank of China (PBOC) has steadily increased its investments in Indian companies, according to reports.
Data from the Ministry of Corporate Affairs (MCA) reveals that as of the end of FY24, the PBOC held shares in at least 35 Indian companies, with a combined portfolio value of around Rs 40,000 crore.
ICICI Bank is the largest investment in PBOC’s portfolio, valued at Rs 6,139 crore, followed by HDFC Bank (Rs 5,344 crore) and Infosys (Rs 5,303 crore). The Chinese central bank also holds Rs 1,414 crore worth of shares in Power Grid Corporation, a government-owned entity.
PBOC’s interest in Indian firms dates back to 2020, when it appeared in the shareholding pattern of HDFC Ltd (now merged with HDFC Bank), raising concerns about Chinese investments in India. In response, the Indian government issued ‘Press Note 3,’ which requires Chinese investors to seek government approval before investing in unlisted Indian companies. While investments in listed companies are unrestricted, the Securities and Exchange Board of India (SEBI) has raised concerns about Chinese entities potentially bypassing these regulations through the Foreign Portfolio Investor (FPI) route.
Other major holdings of PBOC in India include Rs 3,619 crore in TCS, along with stakes worth over Rs 1,500 crore in Kotak Mahindra Bank, Hindustan Unilever, and Bajaj Finance. Additional investments include over Rs 1,100 crore in Maruti Suzuki, Tata Motors, and Ultratech Cement. Other notable investments include stakes in Bajaj Finserv, Asian Paints, and Paytm’s parent company, One97 Communications.
PBOC’s involvement with ICICI Bank began in 2020, when it purchased Rs 15 crore worth of shares during a qualified institutional placement. Its stake in ICICI Bank has since increased to 0.67%. According to data, PBOC does not hold more than 1% in any Indian company, as SEBI mandates disclosure of shareholders owning more than 1% of a listed firm.
In response to concerns about misuse of the FPI route, SEBI introduced measures in August 2023 requiring detailed disclosure of beneficial ownership for certain FPIs. In July 2024, SEBI proposed labeling FPIs with over 50% Chinese ownership as Land Bordering Country (LBC) entities for additional scrutiny, though final regulations are still pending.
Currently, 17 FPIs from China, including Best Investment Corporation and the Asian Infrastructure Investment Bank, are registered in India. Best Investment Corporation, part of China Investment Corporation (CIC), manages $870 billion globally but holds only Rs 800 crore in Indian firms like Infosys and Power Grid.
