India’s thriving initial public offering (IPO) market is attracting a growing number of foreign companies, but many of these listings are not aimed at raising fresh capital for expansion. Instead, they are increasingly being used by global parent companies to monetize their investments and repatriate funds.
Data from Prime Database shows that among six foreign-owned companies that listed their Indian subsidiaries since 2024, only one raised fresh capital. The remaining IPOs were structured entirely as Offer for Sale (OFS) transactions, allowing existing shareholders to sell their stakes without bringing new money into the business.
As a result, foreign parent companies have collectively taken home nearly $5 billion from these listings. South Korean giants Hyundai Motor and LG Electronics alone accounted for more than 80% of the proceeds. According to the data, for every dollar raised through these IPOs, more than $59 flowed out to existing investors.
More OFS-led IPOs in the pipeline
The trend shows no signs of slowing. Several upcoming listings, including Walmart-owned PhonePe and gaming company Modern Times Group’s Indian unit, are expected to follow the OFS route.
Coca-Cola has also indicated that the planned listing of its Indian bottling business will involve a partial stake sale by the US company. Banking sources further suggest that Carlsberg’s proposed India IPO may also be structured as a pure OFS transaction.
Market experts say India’s strong stock market valuations have made local listings an attractive exit strategy for global investors.
High valuations drive foreign interest
India emerged as the world’s second-largest IPO market in 2025, raising $21.8 billion through 367 listings. Despite recent market volatility, a record pipeline of nearly $26 billion worth of IPOs is awaiting regulatory approvals.
The key attraction for foreign firms lies in valuation premiums. Indian subsidiaries of multinational companies often trade at significantly higher valuations than their parent entities overseas.
For instance, Nestlé India trades at a price-to-earnings multiple of nearly 77 times compared to around 22 times for its Swiss parent. Similarly, LG Electronics India commands a higher valuation than its South Korean parent company.
This valuation gap allows global companies to unlock greater value by listing their Indian operations separately.
Concerns over capital outflows
The growing use of OFS structures comes at a time when the Indian rupee is facing pressure. The currency has weakened against the US dollar since 2024, while foreign portfolio investors have withdrawn billions from Indian markets.
Economists and banking experts believe IPO-related repatriation of funds is adding to these outflow pressures. Some analysts have warned that the increasing use of IPOs as exit vehicles rather than fundraising tools could dilute the broader purpose of public markets.
India’s Chief Economic Advisor V. Anantha Nageswaran had earlier cautioned that IPOs were increasingly being used to provide exits for existing investors instead of supporting long-term capital formation.
IPO market continues to evolve
While concerns remain, market participants argue that companies are simply taking advantage of favourable valuations and investor demand. For foreign firms, India’s growing investor base and premium market valuations provide an opportunity to unlock value and improve returns for shareholders.
As more multinational companies consider listing their Indian businesses, the debate is likely to continue over whether IPOs should primarily fuel business growth or serve as a mechanism for investor exits. For now, India’s booming IPO market remains one of the most attractive destinations for global companies seeking liquidity and valuation gains.
