Author: Aadarsh Patel | EQMint
India’s booming initial public offering market is changing the way global investors and multinational companies exit their investments, with more foreign-owned businesses turning to Indian stock exchanges to sell existing stakes.
The shift comes as strong domestic investor participation and relatively high valuations make Indian listings increasingly attractive to overseas shareholders looking to unlock returns.
Foreign Companies Are Using IPOs to Cash Out
A growing number of IPOs involving Indian subsidiaries of global companies are being structured as offer-for-sale (OFS) transactions. Under an OFS, existing shareholders sell their shares to public investors instead of the company raising fresh capital.
Reuters reported that since 2024, six foreign-based companies have listed their Indian businesses in Mumbai. Only one raised new funds, while the others primarily used the IPO to allow existing shareholders to sell their holdings. Together, these secondary offerings generated nearly $5 billion for foreign parent companies.
Hyundai Motor and LG Electronics accounted for more than 80% of those proceeds, highlighting the scale of the trend.
The strategy is continuing with upcoming listings. Walmart’s Indian payments business PhonePe and Modern Times Group’s Indian gaming unit are both expected to use OFS structures. Coca-Cola’s Indian bottling business is also planning to sell part of its parent company’s stake through its proposed listing.
High Indian Valuations Are Driving the Shift
One of the biggest reasons behind the trend is the valuation gap between Indian-listed subsidiaries and their overseas parent companies.
Indian businesses have attracted strong demand from domestic investors, supporting elevated valuations even as global investors have become more selective about Indian equities.
For example, Nestle India has traded at a significantly higher price-to-earnings multiple than its Swiss parent. LG Electronics India has also commanded a higher valuation multiple than LG Electronics in South Korea.
This creates an opportunity for multinational companies to monetise part of their Indian investments at valuations that may be considerably higher than those available in their home markets.
For global shareholders, an Indian IPO can therefore serve two purposes: provide liquidity and establish a public market valuation for the local business.
India’s IPO Market Has Become a Major Capital-Market Hub
India was the world’s second-largest IPO market in 2025 after the United States, with 367 listings raising about $21.8 billion, according to LSEG data cited by Reuters.
The pipeline remains substantial, with around $26 billion worth of IPOs awaiting regulatory approvals.
The momentum has continued into 2026, although market conditions have become more volatile. Recent data show domestic liquidity continuing to support the primary market even as foreign investors have reduced exposure to Indian equities.
This combination of strong local demand and deepening capital markets is making India an increasingly attractive destination for multinational companies considering strategic exits.
IPOs Are Becoming More About Liquidity
The growing use of OFS transactions is also changing the traditional role of an IPO.
Normally, companies go public to raise money for expansion, repay debt, invest in new projects or strengthen their balance sheets. But when an IPO is dominated by an OFS, the proceeds go to existing shareholders rather than the company.
India’s Chief Economic Adviser V. Anantha Nageswaran has previously warned that IPOs were increasingly becoming exit vehicles for early investors instead of mechanisms for raising long-term capital.
That does not necessarily make such listings negative. An IPO can still broaden ownership, improve transparency and create a liquid market for shares. However, the increasing focus on shareholder exits means investors are paying closer attention to how much money actually reaches the company.
The Rupee Adds Another Dimension
The trend also has implications for India’s currency.
When foreign shareholders sell stakes through Indian IPOs and subsequently repatriate their proceeds overseas, the transactions can increase demand for foreign currency.
Reuters reported that the rupee had weakened significantly against the US dollar since 2024, while foreign portfolio investors had sold more than $23 billion of Indian holdings in 2026 at the time of its June report. Analysts have warned that IPO-related capital outflows could add to pressure on the rupee.
A New Exit Playbook for Global Investors
India’s IPO boom is increasingly offering multinational companies a different way to realise the value of their Indian investments.
Rather than waiting for a strategic buyer or selling an entire business, global shareholders can list an Indian subsidiary, retain a stake and gradually monetise their holdings through the public market.
For India, the trend brings deeper equity markets and greater public ownership of major businesses. For global investors, it provides a potentially lucrative exit channel.
The result is a changing IPO landscape where valuation, liquidity and shareholder exits are becoming just as important as raising fresh capital.
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