India's recent frenzy of initial public offerings is attracting many global companies to list local units in Mumbai, but the deals are more often exits than fund-raising exercises for on-the-ground growth. According to data from Prime Database, just one out of six foreign-headquartered firms that listed Indian subsidiaries since 2024 issued fresh equity to raise capital. The other listings were structured as offer-for-sale (OFS) transactions in which existing shareholders sell shares to public investors without creating new capital for the company.
Prime Database's figures show foreign-based parents collected nearly $5 billion from such secondary-offering IPOs. Hyundai Motor and LG Electronics together accounted for more than 80% of that total. The data illustrate an outsized flow of funds back to overseas balance sheets: for every dollar of new money raised across these listings, more than $59 was repatriated to parent companies.
Planned listings in India continue to favor the OFS route. The proposed $1 billion IPO for Walmart's Indian payments business and Modern Times Group's planned $335 million IPO of its local gaming unit are both expected to be structured as OFS deals. Coca-Cola has said that its intended listing of an Indian bottler will involve the U.S. company selling part of its stake. Banking sources also indicated that Carlsberg's planned Indian offering will not include fresh capital and is likely to be an OFS.
Legal advisers and bankers point to rich local valuations as a key driver. "India listings as this provides them liquidity as well as a positive impact on the market cap for their parent," said Prashant Gupta, a partner at law firm Shardul Amarchand, which advised Hyundai and LG on their OFS-structured IPOs.
Market effects and currency pressures
The timing of these large secondary sales coincides with a period of significant weakness in the Indian rupee. The currency has declined about 13% against the U.S. dollar since 2024 and roughly 6% so far this year. Some analysts and bankers warn that the wave of IPO-linked repatriations may be compounding broader foreign capital outflows and placing a steady depreciation bias on the rupee.
In January, MUFG Bank reported that one important contributor to rupee weakness has been India's strong IPO market. Foreign portfolio investors have sold over $23 billion of holdings so far this year, exceeding 2025's record outflows of $18.9 billion. "IPO-linked capital outflows are exerting a steady, though not abrupt, depreciation bias on the rupee," said Tanay Dalal, senior vice president of business and economics research at Axis Bank.
Government officials and market regulators have not signalled any plans to restrict OFS transactions. India’s chief economic adviser, V Anantha Nageswaran, cautioned in November that IPOs had "increasingly become exit vehicles for early investors rather than mechanisms for raising long-term capital," adding that this trend "undermines the spirit of public markets." He did not respond to follow-up queries.
Valuation arbitrage and investor incentives
One of the strongest incentives for foreign parents to sell stakes through Indian listings is the valuation disparity between locally listed units and their overseas parents. Indian investors have pushed valuations of some listed subsidiaries to levels that considerably outstrip parent-company multiples.
For example, Nestle India trades at a price-to-earnings ratio near 77 times earnings, compared with about 22 times for Swiss parent Nestle. LG Electronics' Indian listing was trading at nearly 59 times earnings versus 44 times for its South Korean parent. When Hyundai's Indian unit listed in 2024, it was valued at roughly $18 billion, about 40% of the parent's market capitalisation on that day.
"What's driving this is smart capital allocation - asset owners capitalizing on cross-market valuation arbitrage," said Abhishek Gang, a director at U.S.-based investment bank Houlihan Lokey.
Since 2024, several foreign groups have taken the OFS approach for their Indian units. Examples include Carraro of Italy, Norway's Orkla, and U.S.-based Tenneco Clean Air. The one notable exception among recent foreign listings was Bupa's India health-insurance unit, Niva Bupa. Its IPO combined $84 million of fresh fundraising with a larger $146 million OFS component. In a statement, Niva Bupa said the structure "balanced the company’s capital requirements with shareholder objectives, with the fresh capital supporting growth plans and the OFS providing partial liquidity to existing investors."
Outlook and unanswered questions
The jury remains out on whether the OFS-heavy pattern will alter market dynamics over the longer term. Regulatory filings show a substantial pipeline: LSEG data indicate India was the world's second-largest IPO market in 2025 after the United States, with 367 listings raising $21.8 billion. At the same time, regulatory sources show about $26 billion of IPOs are awaiting approval.
Lawyers and bankers say the present mix of high local valuations and a domestic investor base keen to buy these names make OFS transactions attractive to parent companies seeking liquidity. But commentators also note the tension between short-term shareholder returns for global parents and the traditional public-market function of channeling capital into growth for listed firms in India.
Until authorities indicate otherwise, the pattern of repatriation through secondary offerings appears set to continue, with implications for capital flows, equity valuations of Indian subsidiaries, and currency stability.