Foreign Firms Drain Billions From India IPOs to Fund Global Parents

Top Summary

• What happened: Five out of six foreign-based firms listing in Mumbai since 2024 chose pure Offer-For-Sale (OFS) structures to send capital home.
• Why it matters: Global parents have pocketed nearly $5 billion, intensifying pressures on a weakening Indian rupee.
• What changes: Public markets are increasingly acting as liquidity exits for overseas parents rather than raising fresh expansion capital.
• Who is affected: Indian retail investors, domestic markets, currency regulators, and overseas corporate headquarters.

Billions Sent Overseas via Secondary Sales

India's surging initial public offering (IPO) market has become a goldmine for multinational corporations. However, instead of using these listings to expand local operations, global companies are repatriating billions of dollars back to their headquarters.

According to market research firm Prime Database, five out of six foreign-based firms that listed their Indian subsidiaries in Mumbai since 2024 opted for pure Offer-For-Sale (OFS) structures. This means existing shareholders sold their holdings without raising any new capital for the local businesses.

In fact, for every single dollar of fresh capital raised in these joint listings, more than $59 went out of the country.

Major Corporate Parents Cash Out of India

Global parent companies have successfully pocketed nearly $5 billion through these secondary-market IPOs. Out of this total, South Korean conglomerates Hyundai Motor and LG Electronics accounted for more than 80% of the total payouts.

This trend shows no signs of slowing down, as several other global giants prepare for similar listings in India:

• Walmart's PhonePe plans a $1 billion IPO via the pure OFS route.
• Modern Times Group is preparing a $335 million OFS IPO for its local gaming unit.
• Coca-Cola is planning to sell a portion of its stake in its Indian bottling arm.
• Carlsberg is planning an Indian listing with no new funds raised.

Legal experts point out that sky-high stock valuations in the country have made partial exits highly lucrative. Prashant Gupta, partner at law firm Shardul Amarchand, explained the strategy:

"Global companies are pursuing India listings as this provides them liquidity as well as a positive impact on the market cap for their parent."

Growing Pressure on the Indian Rupee

These massive capital outflows come at a sensitive time for domestic currency markets. The Indian rupee has plunged 13% against the US dollar since 2024, including a 6% drop so far this year.

Financial institutions warn that the wave of IPO repatriations is worsening broader foreign capital flight. So far this year, foreign portfolio investors have offloaded more than $23 billion in holdings, easily surpassing the previous record of $18.9 billion set in 2025.

In January, MUFG Bank highlighted this link in their analysis, writing that "one important contributor to Indian rupee weakness has been the strong IPO market in India."

Tanay Dalal, senior vice president of business and economics research at Axis Bank, also highlighted the currency impact:

"IPO-linked capital outflows are exerting a steady, though not abrupt, depreciation bias on the rupee."

Regulators Raise Red Flags Over Exit Vehicles

While regulatory bodies have not yet moved to restrict or curb these OFS listings, senior government officials have voiced serious concerns regarding the long-term impact on the domestic public market.

In November, India's Chief Economic Advisor V Anantha Nageswaran warned that public listings are drifting away from their primary economic purpose:

"IPOs had increasingly become exit vehicles for early investors rather than mechanisms for raising long-term capital. This undermines the spirit of public markets."

What to Watch Next

Keep a close watch on how the Indian government and market regulators respond if the rupee continues to weaken under pressure from capital outflows. Additionally, the market response to upcoming mega-listings like Walmart's PhonePe and Coca-Cola will signal whether retail investors will continue to fund these multi-billion-dollar corporate exits.