Foreign firms are leveraging India's red-hot IPO market not for expansion funding but to repatriate billions back to headquarters. According to Prime Database data, nearly $5 billion has been withdrawn through secondary-offering IPOs since 2024, with only one of six foreign-based companies actually raising new funds. All other listings have been structured as offer for sale (OFS) where existing shareholders sell holdings to the public without raising any new funds. The trend is continuing with Walmart's planned $1 billion IPO of its Indian payments arm and Modern Times Group's $335 million IPO both taking the OFS route. This week, Coca-Cola announced its Indian bottler listing will have the American firm sell a portion of its stake, while Carlsberg's planned IPO will also be structured as an OFS. As Prashant Gupta from Shardul Amarchand explains, "India listings provide liquidity as well as a positive impact on the market cap for their parent."
The profit repatriation strategy is driven by significant valuation disparities between Indian and overseas listings. LG Electronics India, which listed last year, trades at nearly 59 times versus 44 times for its South Korean parent, while Nestle India has a price-to-earnings ratio of nearly 77 times versus 22 times for Swiss parent Nestle. On the day Hyundai listed its Indian unit in 2024, it was valued at about $18 billion, roughly 40% of its parent's market capitalisation. According to Prime Database data, for each dollar raised in these IPOs taken together, more than $59 went out to foreign parents. As Abhishek Gang from Houlihan Lokey explains, "What's driving this is smart capital allocation - asset owners capitalizing on cross-market valuation arbitrage." Since 2024, IPOs of Indian units of Carraro, Orkla, and Tenneco Clean Air have all had OFS structures, with only Bupa's India unit structuring its local IPO as a mix of fresh fundraising and OFS components.
The OFS trend is compounding existing foreign capital outflow pressures on the Indian rupee. The rupee has fallen 13% against the U.S. dollar since 2024 and 6% so far this year, with foreign portfolio investors selling more than $23 billion of their holdings this year, surpassing 2025's record outflows of $18.9 billion. As Tanay Dalal from Axis Bank notes, "IPO-linked capital outflows are exerting a steady, though not abrupt, depreciation bias on the rupee." MUFG Bank wrote in January that "one important contributor to Indian rupee weakness has been the strong IPO market in India." India was the world's second-largest IPO market in 2025 with 367 listings raising $21.8 billion, and a record $26 billion worth of IPOs are awaiting approvals, according to LSEG data. The trend reflects sky-high stock valuations in India in recent years, making partial exits more attractive than raising new funds for expansion.
Government officials have not indicated attempts to curb the OFS trend, though concerns about market structure remain. India's Chief Economic Advisor V Anantha Nageswaran warned in November that IPOs had "increasingly become exit vehicles for early investors rather than mechanisms for raising long-term capital," stating "This undermines the spirit of public markets." However, Prashant Gupta from Shardul Amarchand explains that "Global companies are pursuing 'India listings as this provides them liquidity as well as a positive impact on the market cap for their parent." The trend reflects smart capital allocation by asset owners capitalizing on cross-market valuation arbitrage. Despite current global headwinds, Indian markets continue to offer strong long-term opportunities, with investors becoming more selective about visibility, balance sheet strength, and businesses that can sustain growth despite global volatility.
