Market regulator Securities and Exchange Board of India (SEBI) is monitoring equity transactions in India by Chinese companies and banks, according to a BusinessLine report.
Such transactions have come under the scanner at a time when the share prices of companies have dropped due to the economic impact of the coronavirus pandemic.
Moneycontrol could not independently verify the story.
SEBI's scrutiny comes after China's central bank recently raised stake in Housing Development Finance Corporation (HDFC) to a little over 1 percent.
Globally, transactions by Chinese firms and institutions have come under scrutiny recently since the assets are being purchased at low valuations, experts told BusinessLine.
Nations such as the US, Japan and Australia have already placed restrictions on Chinese companies buying assets, the report said.
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On April 11, HDFC said People's Bank of China raised its stake to 1.01 percent from 0.8 percent.
Shankar Sharma, Co-founder of First Global, told the publication that PBOC's transaction should be taken seriously.
"Even the US is considering restricting investments and listing by Chinese companies, then why not India," Sharma said.
A separate report by Mint said the government is not pleased that the transaction occurred without any red flags being raised.
PBOC's move has drawn the finance ministry's attention, the report added.
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