Chinese tech giant Tencent had bought a stake worth $264 million (about Rs 2,060 crore) in Walmart-owned e-commerce firm Flipkart from its co-founder, Binny Bansal, through its European subsidiary, according to the sources.To get more tencent news, you can visit shine news official website.

The transaction was completed on October 26, 2021. However, it was shared with government authorities at the beginning of this financial year. Flipkart is registered in Singapore and has operations in India only.Binny Bansal now holds about 1.84 per cent in Flipkart after selling part of his stake to Tencent Cloud Europe BV. The story was first reported by news agency PTI.

“Tencent is an early investor in Flipkart and this transaction happened last year when SoftBank along with various sovereign funds invested $3.6 billion in Flipkart,” said a person familiar with the matter. “That time Binny Bansal diluted some of his stake to Tencent.”

After this transaction, the Tencent arm holds 0.72 per stake in Flipkart, valued at around $264 million.The government had brought press-note 3 (2020 series) during the initial days of the pandemic in April 2020. It was an immediate reaction to the concerns of Indian companies being vulnerable to opportunistic takeovers during the pandemic. Press-note 3 requires that all investments from entities, which are based in a land-bordering country, or when the beneficial owner of the investment is based in a land-bordering country, will have to be made under the ‘approval route’ and will require a security clearance.

However, the Tencent-Bansal deal does not fall under the purview of 'Press Note 3', according to the sources.“This is because Tencent’s stake is less than 1 per cent and also Flipkart has been a Singapore-registered entity,” said a person.

Last year in July, Flipkart Group carved a niche for itself in the global league by raising $3.6 billion, including from SoftBank, which had exited the firm, valuing the company at $37.6 billion, which was more than a 50 per cent rise in a year.

In July 2020 Walmart led a $1.2-billion round in Flipkart, valuing the e-commerce firm at $24.9 billion. In September 2020, Tencent invested $62.8 million in Flipkart, according to a report by business intelligence platform Paper.vc.

The investment comes amid Sino-India tensions, including the Chinese app ban and the changes to the foreign direct investment (FDI) norms and pre-clearance mechanisms on investments from China.

The funding, by far the largest by any in the Indian start-up ecosystem, was led by financial investors GIC, Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2, and Walmart, along with investment from sovereign funds DisruptAD, the Qatar Investment Authority, and Khazanah Nasional Berhad.

Other marquee investors are Tencent, Willoughby Capital, Antara Capital, Franklin Templeton, and Tiger Global. This fundraise is giving enough firepower to Flipkart to counter competition from Amazon, Reliance JioMart, and Tata Digital.Walmart’s acquisition of Flipkart for $16 billion in 2018 not only provided blockbuster exits to its investors but also turned the founders — Sachin and Binny Bansal — into billionaires. Both Sachin, as well as Binny, are now active in the Indian start-up ecosystem, backing several of the promising start-ups through their personal funds and family offices.

Chinese investors, such as Alibaba, Tencent, and Xiaomi, are also active in the Indian start-up space, and have collectively invested billions of dollars. Tencent has invested over $2 billion in Indian startups since 2016. Last year it also invested over $200 million in the Indian social media platform ShareChat.

India is considering easing scrutiny on certain foreign direct investments, after rules mainly aimed at China created a bottleneck for inflows, according to a Bloomberg report. The report said that currently, government scrutinizes all investment proposals from companies that are either based in countries that share a land border with India or have an investor from one of these nations. The report said that the government is now considering exempting proposals where the so-called beneficial ownership is less than 10 per cent, which means the investor may be from a neighbouring country but holds only a small stake in the firm proposing the investment.