India IPO gold rush becomes foreign firms’ cash-out machine

Key points

• AI image Valuation premium driving listings Concerns over rupee and capital outflows Concerns over IPO purpose Foreign companies are increasingly using India’s booming initial public offering (IPO) market to cash out investments and send billions of dollars back to their home countries rather than raise fresh capital for expansion
• according to a Reuters analysis.As per the report
• only one of the six foreign-based companies that listed their Indian subsidiaries in Mumbai since 2024 raised new funds.The remaining IPOs were structured entirely as Offer for Sale (OFS) issues
• allowing existing shareholders to sell their stakes without bringing new capital into the business.Data from Prime Database showed foreign parent companies have pocketed nearly $5 billion through such secondary-offering IPOs.South Korean giants Hyundai Motor and LG Electronics accounted for more than 80 per cent of those proceeds.For every dollar raised in these IPOs collectively
• more than $59 flowed out to overseas shareholders.The trend...