SoftBank Group Corporation’s woes in China and view on the Indian economy neatly encapsulate China’s impending collapse and India’s ascent as the global economy’s new motor.
The Tokyo-based firm is well-positioned to benefit from India’s first wave of startup IPOs, which began in July and will continue through early next year. When the results are in, one of the world’s most prolific technology investors, which struggled with its early wagers in the country, might see a major turnaround.
SoftBank is flocking to India, hoping to stow money in much safer and profit-yielding stocks, after suffering massive losses in China as a result China’s strict regulatory measures have made international investors wary of placing wagers in the country, prompting them to hunt for better opportunities elsewhere. Without a doubt, India is becoming the preferred destination for investors fleeing China.
The Japanese multinational conglomerate is planning to increase its investments in India, with plans to invest between $5 billion and $10 billion in Indian start-ups by the end of the year.
“We might spend $5 billion to $10 billion in 2022 if we identify the appropriate companies,” said Rajeev Misra, CEO of SoftBank Investment Advisers. The Japan Times claimed that the company’s investments in India have so far delivered better-than-expected results
Since the start of the epidemic, the Chinese economy has been on a downward trend. China is the world’s leading producer and near-monopoly in the steel industry, unknowingly allowing India to overtake China as the world’s greatest steel producer. As a result of Xi’s trade conflict with Australia, India has surpassed China as the world’s largest steel producer.
China’s manufacturing industry is sagging due to a severe lack of coal. It’s also one of the key reasons why China is experiencing a severe electricity shortage. Coal is a necessary ingredient in the manufacture of steel. Steel production also necessitates the use of electricity.
Similarly, SoftBank appears to be rushing to India following its profitable loss in China. Any business that has incurred multibillion-dollar losses will separate itself from the organization that is the source of those losses. As a result, China has become a bleak chapter in SoftBank’s history. India, on the other hand, is SoftBank’s new frontier, where the company’s investments have yielded massive returns.