Foreign Firms Cash In on India's IPO Boom

India’s booming initial public offering (IPO) market continues to attract global corporations, but many foreign companies are using local listings primarily as an opportunity to monetize their investments rather than raise capital for expansion. Recent data shows that most overseas firms listing their Indian subsidiaries have chosen offer-for-sale (OFS) structures, allowing existing shareholders to sell stakes to public investors without injecting fresh funds into the business.

Since 2024, six foreign-owned companies have launched IPOs in India, yet only one included a significant fundraising component. The majority were structured entirely as secondary share sales, enabling parent companies to repatriate billions of dollars. Hyundai Motor and LG Electronics alone accounted for most of the nearly $5 billion returned to overseas headquarters through these transactions. Upcoming IPOs from Walmart-backed PhonePe, gaming company Modern Times Group, and other multinational firms are expected to follow a similar approach.

Market experts believe India’s elevated stock market valuations are driving this trend. Indian subsidiaries often command much higher valuation multiples than their foreign parent companies, creating an attractive opportunity for investors seeking liquidity. Strong participation from domestic investors and sustained demand for equities have further boosted valuations, making local listings highly appealing for multinational corporations.

However, the growing preference for OFS-based IPOs has raised concerns about capital outflows and pressure on the Indian rupee. The currency has weakened considerably against the U.S. dollar since 2024, while foreign investors have withdrawn substantial funds from Indian markets. Analysts suggest that large-scale IPO-related repatriations may be contributing to the rupee’s depreciation alongside broader foreign capital outflows.

Despite these concerns, India remains one of the world’s leading IPO destinations. Hundreds of companies continue to pursue public listings, and a record pipeline of IPO candidates is awaiting regulatory approval. While policymakers have expressed concerns that IPOs are increasingly serving as exit routes for investors rather than vehicles for raising growth capital, the combination of strong market valuations and investor demand continues to make India an attractive venue for multinational companies seeking profitable partial exits.