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Foreign companies are using India's busy IPO market to sell stakes and send money home. Most are not raising fresh capital for growth.
Only one of six foreign-based companies listing Indian subsidiaries in Mumbai since 2024 raised new funds. The other five used Offer for Sale structures. These let existing shareholders sell stakes without bringing new capital into the business.
Data from Prime Database shows foreign parent companies have taken nearly $5 billion through such IPOs.
- Hyundai Motor and LG Electronics accounted for more than 80% of those proceeds
- For every dollar raised collectively, more than $59 flowed out to overseas shareholders
More listings are coming. Walmart-owned PhonePe plans a $1 billion IPO. Modern Times Group plans a $335 million listing for its Indian unit. Both are expected to use the OFS route. Coca-Cola will sell part of its stake through its Indian bottling unit listing. Banking sources say Carlsberg's proposed India IPO is also likely to avoid raising fresh capital.
Bankers and legal experts say high valuations in Indian equity markets make local listings attractive. Global firms seek liquidity and higher market values for parent companies.
- Nestle India trades at a price-to-earnings ratio of nearly 77 times. Its Swiss parent trades at around 22 times
- LG Electronics India trades at nearly 59 times earnings. Its South Korean parent trades at 44 times
- Hyundai Motor India listed in 2024 with a value of roughly $18 billion. This equals nearly 40% of the parent company's total market capitalization
The growing use of OFS-led IPOs adds pressure to the Indian rupee. The currency has fallen 13% against the US dollar since 2024 and 6% this year. Analysts link part of this weakness to IPO-related repatriation.
- MUFG Bank said strong IPO activity has been one important contributor to rupee weakness
- Foreign portfolio investors have sold more than $23 billion worth of Indian assets this year. This exceeds the previous annual record of $18.9 billion
- Axis Bank said IPO-linked capital outflows exert a steady depreciation bias on the rupee
India was the world's second-largest IPO market in 2025 after the United States. It saw 367 listings raising $21.8 billion, according to LSEG data. A record $26 billion worth of IPOs are awaiting approval.
Some policymakers worry IPOs are becoming exit routes instead of tools for growth capital. India's chief economic advisor V Anantha Nageswaran warned in November IPOs had increasingly become exit vehicles for early investors rather than mechanisms for raising long-term capital.
Recent foreign-company listings for Carraro, Orkla, and Tenneco Clean Air were all launched entirely through OFS structures. Niva Bupa Health Insurance was the only exception. Its IPO combined fresh fundraising of $84 million with a larger $146 million OFS component.