China’s plans of pushing in more capital to India’s startup ecosystem and new businesses, just got another huge impetus. China’s Shenzhen Stock Exchange is reportedly making a platform that will facilitate access of Chinese capital for Indian fin-tech companies and technology-based startups.
The platform, which already exists for Chinese companies, will now be extended for new generation of Indian tech companies. The initiative is being called as Cross-border Capital Services Platform.
The Tech 2.0 platform will also facilitate information sharing, and connecting Indian tech companies to connect with private equity and venture capital investors from China. The first round of investments will flow from China to Indian companies.
It will be operated by Shenzhen Securities Information Co., Ltd, which is a wholly owned subsidiary of Shenzhen Stock Exchange. The Shenzhen Stock Exchange (SZSE) is the largest in China by trading volume, with average daily turnover of about $50 billion in 2016.
LiveMint reports that the officials of the exchange, including Chairman Wu Lijun were in India last week for a roadshow to showcase Indian companies to Chinese investors. Huiqi Pei, head of international department, Shenzhen Stock Exchange said to the news portal that India is their first market for such cross border funding. He added:
China and India are often depicted as the “world factory” and “world office”, both of which are indispensable segments in global value chains. Economic cooperation of the two most populous countries will form the most competitive production base and most attractive consumption markets. Yet the mutual investment between the two sides is by now not as active as it should have been.
China is ranked at number 18 in terms of investment in India through the Foreign Direct Investment and only seven Chinese institutional investors are registered as foreign portfolio investors (FPIs). In the said roadshow, more than 40 Chinese investors participated to look for potential Indian startups.
Earlier, The Securities and Exchange Board of India (SEBI) in 2014 had proposed an exchange platform to allow for such meeting of investors with tech companies. However, the platform did not take off due to lack of takers and stricter regulatory requirements.