China’s central bank, the People’s Bank of China, acquired 1.75 crore shares, or 1.01% stake in Housing Finance Corporation, or HDFC, India’s No 1 housing finance company. Keki Mistry, vice chairman and CEO of HDFC, said the Chinese bank already held 0.8% stake in the company as of March 2019 and it had gone up to 1.01% in March 2020. The development led to government reaction when it brought law requiring foreign direct investments in Indian companies by institutions in those countries which share a common border with India to obtain prior permission from the government to do so. During the last 1 month, the stock prices of HDFC fell over 25% amid the beating across stocks due to the coronavirus crisis. Foreign portfolio investors (FPIs) hold 70.88% stake in the company which also includes a 3.23% shareholding of the government of Singapore. There have been apprehensions that in a fragile economy following the havoc created by the coronavirus, Chinese institutions are attempting hostile takeovers of institutions in the neighbouring countries.
