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India’s IPO market booms as global firms list local units
Global companies are increasingly listing their Indian subsidiaries on local stock exchanges, as India remains one of the world’s busiest IPO markets in 2025.
Firms such as CJ Darcl Logistics and LG Electronics have filed for or completed IPOs to capture higher local valuations, while Coca-Cola’s Indian bottling unit is reportedly considering a listing.
Siemens listed its India energy arm in March, with the unit trading at a much higher forward price-to-earnings ratio than its German parent.
LG Electronics India, after its IPO, reached a market value of US$12.6 billion, while its parent is valued at about US$10.1 billion, despite the Indian unit generating lower net income.
Industry analysts cite the valuation gap to faster revenue growth in India and strong domestic liquidity, driven by rising mutual fund investments and retail investor participation.
Recent IPOs, such as Tata Capital and LG Electronics, were fully subscribed, with most proceeds going to existing shareholders rather than raising new capital.
Multinationals typically retain majority stakes in their listed Indian subsidiaries.
🔗 Source: CNBC
🧠 Food for thought
Implications, context, and why it matters.
Premium valuations may erode as MNC subsidiaries increase public float
- Indian subsidiaries of multinational corporations trade at 2–4x their parents’ P/E; the Nifty MNC Index carries a P/B of 8.6x versus the Nifty 50 at 3.4x, near a 150% premium 1.
- Recent MNC IPOs skew to Offer for Sale (OFS) deals, so proceeds go to selling shareholders, often the foreign parent, not the Indian unit 1.
- SEBI requires a 25% public float. Subsidiaries with promoter stakes above 75% must sell down, which can thin the scarcity premium (extra valuation due to limited tradable shares) that props up prices.
- MNCs in India have long traded at premia, with the Nifty MNC Index at higher multiples 1, yet new listings may not keep that gap as float widens.
Institutional investors may find opportunities as listings meet minimum public shareholding norms
- Nearly 45% of NSE-listed companies have promoter stakes above 60% 2. Large Public Sector Undertakings (PSUs) sit well over the 75% mark 3; Life Insurance Corporation of India (LIC the largest life insurer in India; 96.5%); Indian Railway Finance Corporation (IRFC the financing arm of Indian Railways; 86.36%); General Insurance Corporation of India (GIC a state-owned reinsurer; 85.78%).
- The 25% rule will trigger block deals and OFS as subsidiaries cut stakes to comply.
- Institutions can map upcoming IPOs and track sell-down timelines to line up for secondary offerings.
- This supply from rule-based selling differs from distress, which can let buyers pick quality assets at saner prices as float rises.
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