India's booming initial public offering (IPO) market is increasingly becoming a route for foreign companies to monetise their Indian investments rather than raise capital for expansion, according to a Reuters report.
Data from Prime Database showed that of the six foreign-owned companies that listed their Indian units in Mumbai since 2024, only one raised fresh capital. The remaining IPOs were structured entirely as offers for sale (OFS), allowing existing shareholders to sell stakes to public investors without bringing new funds into the business.
Foreign parent companies have pocketed nearly $5 billion through such IPOs, with Hyundai Motor and LG Electronics accounting for more than 80% of the proceeds. Reuters reported that for every dollar raised through these IPOs collectively, more than $59 flowed out of India to overseas shareholders.
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The trend is set to continue. Walmart-owned PhonePe's planned $1 billion IPO and Modern Times Group's proposed $335 million listing of its Indian gaming business are both expected to follow the OFS route.
Coca-Cola has also indicated that it will sell part of its stake in its Indian bottling business through a planned listing, while banking sources told Reuters that Carlsberg's proposed India IPO is also likely to involve no fresh capital raising.
“The India listings provide liquidity as well as a positive impact on the market cap for their parent,” Prashant Gupta, partner at law firm Shardul Amarchand, which advised Hyundai and LG on their IPOs, told Reuters.
The rise in OFS-led IPOs comes amid concerns over pressure on the rupee. The Indian currency has weakened 13% against the U.S. dollar since 2024 and 6% so far this year. In January, MUFG Bank said its analysis showed that India's strong IPO market had become “one important contributor to Indian rupee weakness”.
Economists say the attraction lies in India's premium valuations. Listed Indian subsidiaries often command significantly higher valuation multiples than their overseas parents. Nestle India trades at nearly 77 times earnings, compared with 22 times for its Swiss parent, while LG Electronics India trades at nearly 59 times earnings versus 44 times for its South Korean parent.
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“What's driving this is smart capital allocation, asset owners capitalizing on cross-market valuation arbitrage,” Abhishek Gang, director at investment bank Houlihan Lokey, told Reuters.
India was the world's second-largest IPO market in 2025 after the U.S., raising $21.8 billion through 367 listings, according to LSEG data. Regulatory filings show another $26 billion worth of IPOs are currently awaiting approval.
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