India-Canada Tensions: Zomato, Paytm, Kotak To Pay The Price

Amidst strained ties between India and Canada over the last couple of days, investors have started giving a second thought to their investment in the two countries. The tension between India and Canada escalated after Canadian Prime Minister Justin Trudeau claimed that the Indian government could be linked to the murder of Khalistani separatist Hardeep Singh Nijjar. India has rejected the charge as absurd. The tense relationship between the two countries has also raised concerns about their economic ties.

According to a Moneycontrol report, the Canada Pension Plan Investment Board (CPPIB), which invests money from the Canada Pension Plan (CPP) to generate returns, has made a series of investments in Indian companies. These companies include Acko, Zomato, Kotak Mahindra Bank, ICICI Bank, Infosys, Wipro, and several others.

After the diplomatic relations between India and Canada deteriorated, CPPIB-owned stocks have already taken a beating.

Canada Pension Plan Investment Board is Canada's largest pension and has significant holdings in some of the Indian companies. CPPIB reported an investment of $21 billion in India almost a year ago.

CPPIB also holds over 20.35 crore equity shares or 2.37% stake in Zomato as of June 2023. Zomato shares were trading 0.75% lower at Rs 99.21.

The Canadian fund owned 4.38 crore Delhivery shares, aggregating to 6% shareholding in the company. Delhivery share price was down 0.17% at Rs 429.70.

Additionally, CPPIB owns a 2.18% stake in Indus Towers, a 1.76% stake in One 97 Communications, and a stake of 1.47% in FSN E-Commerce Ventures.

Today, the share price of Indus Towers, Nykaa, Zomato, Paytm, and Delhivery all traded in the red.

As diplomatic ties between India and Canada turned have soured, India has warned its citizens to "exercise utmost caution" while in Canada. The India-Canada relationship has hit a new low and there are concerns that it will impact the trade between two countries. Last week, a Mint report cited a senior government official saying that the negotiations between India and Canada on the free trade agreement (FTA), have also come to a halt due to political concerns.