The Alibaba Group of China has put plans to invest in a hold in companies in India and according to two sources who are very much aware of the plans has said that amidst the rising political tensions between the two countries the business relations have soured.
Alibaba which is instrumental in fuelling the incredible growth of several start-ups in India is not going to put in fresh funds as part of the business to further expand its investments in India at least in the coming six months according to sources.
Nevertheless, they further added that there have been no plans for any kind of reduction in its stakes or exit the investment process.
Alibaba did not provide any kind of response to any of the requests for further comment.
The conglomerate from China along with its affiliates Ant Group and Alibaba Capital Partners has already invested over $2 billion in companies in India since the year 2015 and has also participated in funding rounds of another $1.8 billion at least according to reliable data from PitchBook that has been tracking private market financing.
The fundraising plans could slow down after hitting the brakes for some of the investee companies of Alibaba in India that includes the payment platform of Paytm as well as food delivery service and restaurant aggregator e-grocer BigBasket and Zomato.
Ant Group that has already been preparing for an IPO has called out the challenges on Tuesday that it has been facing India.
In one of its IPO filing, it has been said by Ant that the change of rules in foreign investments in India has led to a situation of further evaluation of the timing about its additional investment in Zomato.
It has also been said by Ant that it counts on Paytm owner One97 Communications in which it has a stake of 30% as a joint venture and an associate partner over which it has already got significant influence.
In April, India put investments from China and other bordering nations that came under great scrutiny so that opportunistic takeovers are prevented amid the pandemic of Covid-19.
Nevertheless, the border clash in June in which 20 Indian soldiers have been killed and tensions escalated, and stricter curb were imposed on Chinese businesses and goods amid boycott calls.
According to a source, Alibaba and few other companies have put their investment plans on hold for the coming six months and they are hopeful that things will cool off a bit after that.
According to an anonymous person, no one is going to plan in putting their stakes in ventures in India on the block with the given market condition and the fact that India has got so many buyers.
Start-ups in India are heavily funded by Chinese investors like Tencent and Alibaba. Bankers are looking to bolster their presence in India and aiming to increase revenues outside China.
A lot of interest is shown by the US and European based investors to fill in the gap left by the Chinese as the deal-making is going to be a bit longer.
