When Carlsberg A/S begins preparations for a potential $700 million listing of its Indian subsidiary, it is tempting to see it as just another corporate transaction.

It is not.

According to people familiar with the matter, the Danish brewer has appointed Kotak Mahindra Capital, along with the Indian units of JPMorgan and Citigroup, to advise on a proposed initial public offering of Carlsberg India. A draft red herring prospectus could be filed as early as May. The proposed offering is expected to be largely an Offer for Sale (OFS), meaning the parent company would sell part of its stake rather than issue fresh shares.

In simple terms: this is not about raising growth capital for India; it is about unlocking value.

Carlsberg India is already the country’s second-largest brewer, commanding roughly 22% of the beer market and posting revenue of around ₹90 billion for the fiscal year ended March 2025. The business is established, profitable, and deeply embedded in one of the world’s fastest-growing consumer markets.

So why list now?

Because India’s capital markets are currently willing to pay for growth in ways that many global exchanges are not.

And Carlsberg is not alone.

Across sectors – automobiles, electronics, industrial engineering, consumer goods – multinational corporations are increasingly spinning off or partially listing their Indian subsidiaries. The objective being to tap into India’s deep domestic liquidity pool and benefit from valuation premiums that are often dramatically higher than those enjoyed by the parent companies overseas.

Why Global Companies Are Listing Indian Units

India’s IPO market is not merely active; it has become one of the most powerful capital formation engines globally.

Even as foreign institutional investors have been net sellers in India’s secondary markets this year, global corporations are lining up to list their Indian arms. The reason is straightforward: Indian investors are assigning higher earnings multiples to high-growth domestic businesses compared to how similar businesses are valued abroad.

For multinational companies, India is no longer just a growth market. It is a valuation engine.

This shift marks a structural evolution in India’s financial ecosystem. For decades, global firms viewed India as a manufacturing base, a sales destination, or a strategic long-term investment. Now, it is increasingly being viewed as a capital market opportunity in its own right.

The logic is compelling:

• India offers stronger growth visibility than many developed markets.
• Domestic liquidity (fuelled by mutual funds and Systematic Investment Plans (SIPs) has deepened significantly.
• Retail participation has surged.
• Local investors show a strong appetite for well-governed multinational brands.

The result? A pricing gap. And that gap has created what bankers and fund managers privately describe as valuation arbitrage.

The Valuation Arbitrage Story
The clearest evidence of this phenomenon can be seen in recent high-profile listings.

Hyundai vs Hyundai India: Hyundai Motor Company listed its Indian subsidiary, Hyundai Motor India, through a large Offer for Sale, raising approximately $3.3 billion, the largest IPO in India’s history.

The structure was telling. It was almost entirely an OFS, meaning the South Korean parent monetised part of its stake without materially diluting the Indian business.

At the time of listing, Hyundai Motor India commanded valuation multiples significantly richer than those of its parent. While the global entity traded at modest earnings multiples typical of mature auto markets, the Indian subsidiary was priced as a high-growth consumption story – driven by rising middle-class demand, expanding SUV penetration, and structural automotive growth.

In other words, the same brand. Two markets. Two very different valuations.

LG Electronics vs LG India: A similar story unfolded with LG Electronics and its Indian arm, LG Electronics India.

The parent company trades at single-digit forward price-to-earnings multiples in South Korea. The Indian subsidiary, however, debuted at a dramatically higher multiple – reflecting expectations of faster revenue growth, rising appliance penetration, and expanding consumer spending.

Even more striking was the post-listing surge, which temporarily pushed the Indian subsidiary’s market capitalization close to – and at points above – that of its parent.

The message to multinational CFOs was unmistakable – India rewards growth stories with a premium.

Siemens Energy vs Siemens Energy India: The divergence is not limited to consumer-facing brands.

Siemens Energy AG trades at elevated but global-market-consistent multiples overseas. Its Indian energy arm, Siemens Energy India, however, trades at substantially higher earnings multiples – in some instances nearly double.

This is where capital market engineering meets growth story.

By carving out Indian operations and allowing local price discovery, multinational corporations are effectively isolating the faster-growing segment of their business and subjecting it to a market willing to pay more for that growth.

The mechanics are elegant:

• Parent retains majority control (often 70–85%)
• Sells minority stake via OFS
• Unlocks capital at higher valuation
• Improves consolidated return metrics
• Potentially boosts parent’s sum-of-parts valuation
• The parent company monetises growth without losing strategic control.
• Indian investors, meanwhile, gain access to global brands embedded in domestic expansion stories.

It is a mutually beneficial transaction – at least for now.

Why Is India Paying More?

If valuation gaps were isolated incidents, they could be dismissed as market exuberance. But the consistency of the premium across sectors from autos, electronics, engineering, consumer goods, suggests something deeper.

India is not randomly overpaying. It is pricing in a different growth trajectory.

That premium rests on four structural pillars.

1) Growth Differential: The India Multiplier

The most straightforward explanation is growth.

Indian subsidiaries of multinational corporations are expanding at low-to-high double-digit revenue growth rates in many cases, while their global parents operate in mature, slower-growing markets with single-digit expansion.

Take consumer electronics, automobiles, or beverages. India’s per capita penetration levels remain significantly below developed markets. Rising disposable incomes, urbanisation, and aspirational consumption patterns are expanding the addressable market year after year.

For global parents facing stagnant demand in Europe or East Asia, India often represents their fastest-growing geography.

Indian investors are not valuing these subsidiaries as extensions of global conglomerates. They are valuing them as domestic growth companies.

That distinction matters. A subsidiary growing at 12–18% annually in a structural growth market will command a very different multiple than a parent growing at 3–5% in a saturated economy.

2) The Liquidity Revolution: SIPs, Mutual Funds and Retail Power

The second pillar is liquidity and it is arguably the most powerful one.

Over the past decade, India’s domestic savings behaviour has undergone a quiet transformation. Retail investors have steadily shifted from traditional fixed deposits and gold into equities – primarily through mutual funds and Systematic Investment Plans (SIPs).

The Reserve Bank of India has noted a sharp rise in mutual fund participation within household financial savings. Monthly SIP inflows now run into tens of thousands of crores, creating a predictable, recurring stream of domestic capital into equity markets.

This structural liquidity acts as a shock absorber. Even when foreign institutional investors exit secondary markets, domestic institutions continue deploying capital.

The effect is profound: Large IPOs can be absorbed without destabilising markets. Well-known multinational brands attract strong subscription from retail and institutional investors. Valuation support becomes more resilient.

In short, India now has the domestic financial depth to sustain premium pricing.

3) Governance Premium: The MNC Advantage

There is also a perception factor at play.

Multinational subsidiaries are often viewed as having:

• Stronger corporate governance standards
• Transparent accounting practices
• Established global compliance frameworks
• Professional management systems

In a market where governance lapses periodically erode investor trust, global brands carry credibility. Indian investors frequently assign a governance premium to these businesses – particularly when compared to mid-cap or family-run enterprises.

This is one reason why offers from multinational subsidiaries tend to see strong institutional interest. They combine domestic growth potential with global corporate structures.

4) Capital Market Maturity: India’s Structural Shift

Perhaps the most underappreciated factor is how far India’s capital markets have evolved.

India led the world in IPO volumes in 2024, with hundreds of listings across mainboard and SME segments. The ecosystem today is capable of absorbing multi-billion-dollar offerings – something that would have been difficult a decade ago.

Indian exchanges are no longer peripheral emerging market venues. They are becoming central capital allocation platforms for global firms.

This maturation has consequences:

• Price discovery is more sophisticated.
• Institutional participation is broader.
• Retail participation is deeper.
• Sectoral diversity in listings is expanding.

For multinational boards evaluating capital allocation strategies, India now offers scale, liquidity, and investor appetite.

The Premium – Structural or Temporary?

The combination of higher growth, deepening liquidity, governance comfort, and market maturity explains why Indian subsidiaries often trade at significantly higher multiples than their global parents.

But it also raises a harder question: Is this a structural re-rating of India’s growth story – or a liquidity-driven overshoot?

Some fund managers argue that Indian markets, much like U.S. markets in certain cycles, have a tendency to overpay for visible growth. Smaller IPOs in particular have delivered outsized listing gains in recent years, reinforcing momentum.

Yet the counterargument is equally compelling: if India’s growth trajectory remains intact, and domestic capital formation continues expanding, the premium may not be irrational – merely forward-looking.

For multinational corporations watching from abroad, the conclusion is pragmatic.

If India is willing to assign higher valuations to faster-growing domestic operations, it makes strategic sense to unlock that value.

And that is precisely what companies like Carlsberg appear poised to do.

The OFS Debate – Value Unlocking or Risk Transfer?

A striking feature of many recent multinational listings in India is not just their size – but their structure.

Most of the high-profile offerings have been dominated by Offers for Sale (OFS), where the parent company sells existing shares rather than the subsidiary issuing fresh equity to raise growth capital.

Hyundai Motor India raised roughly $3.3 billion largely through an OFS. LG Electronics India followed a similar route. Now, Carlsberg India is reportedly preparing a structure that may also lean heavily on secondary share sales.

The pattern is difficult to ignore.

According to market data providers, more than two-thirds of IPO proceeds raised in India in 2025 have gone toward existing investors cashing out, rather than into fresh capital for corporate expansion.

That reality fuels a growing debate.

The Critics’ Argument

Sceptics argue that multinational corporations are effectively monetising peak valuations by selling minority stakes into a liquidity-rich market.

In this view:

• Parents unlock capital at elevated multiples.
• Domestic investors assume market risk.
• Fresh capital for expansion is limited.
• Growth expectations are priced aggressively from day one.

Some critics frame this as a transfer of risk – from global balance sheets to Indian retail and mutual fund investors. If valuations correct, it is local investors who bear the volatility.

The Counterargument: Strategic Monetisation

Defenders of the OFS-heavy structure present a different perspective.

In most cases, multinational parents retain between 70% and 85% of their Indian subsidiaries even after listing. Strategic control remains firmly intact.

The partial sale serves several purposes:

Capital Reallocation: Funds raised can be deployed globally — toward debt reduction, R&D, acquisitions, or shareholder returns.

Value Discovery: Listing establishes an independent market valuation for the Indian business, which may not be fully reflected in the parent’s consolidated valuation abroad.

Future Fundraising Flexibility: Once listed, the Indian subsidiary gains access to domestic capital markets for future Qualified Institutional Placements (QIPs), rights issues, or bond issuances.

Balance Sheet Optimisation: Higher valuations in India can enhance the parent company’s sum-of-parts analysis, potentially supporting its own share price. From this perspective, OFS-led listings are not exits – they are financial optimisation strategies.

Primary vs Secondary: The FII Paradox

Interestingly, while foreign institutional investors have been net sellers in India’s secondary markets this year, they continue to participate in primary offerings.

Data suggests a clear distinction in behaviour:

• Secondary markets may reflect caution or profit-taking.
• Primary markets remain attractive for structured growth exposure.

This divergence reinforces the idea that India’s IPO ecosystem has developed into a distinct capital allocation channel – somewhat insulated from broader market volatility.

The Core Question

At its heart, the OFS debate comes down to one issue: Is India’s valuation premium sustainable enough to justify the pricing at which these subsidiaries are being sold?

If growth remains robust and domestic liquidity continues expanding, multinational listings may prove mutually beneficial. But if growth slows or liquidity tightens, the sharp premium between parent and subsidiary valuations could narrow – testing investor conviction.

For now, the data suggests that investor appetite remains strong.

Large offerings are being absorbed. Listing gains remain positive in many cases. Smaller IPOs, in particular, have delivered outsized returns relative to broader indices.

And that brings us to the broader backdrop – the macroeconomic and policy tailwinds that make India uniquely positioned to attract not just manufacturing capital, but financial capital as well.

The Macro Backdrop, Why India Looks Irresistible

The surge in multinational IPO activity is not occurring in isolation. It is anchored in a broader macroeconomic narrative that continues to distinguish India from many global peers.

At a time when several developed economies are struggling with slow growth, demographic pressures, and demand fatigue, India is presenting a different picture: expanding consumption, rising manufacturing ambition, and steady capital inflows.

For global corporations, that combination is difficult to ignore.

Consumption Engine: A Market Still Expanding

Private consumption in India has shown steady resilience. Official projections place growth in private consumption expenditure at around 7% in FY 2024–25, supporting demand across automobiles, appliances, and consumer goods.

This expansion is visible in sectoral data: 

• Domestic vehicle volumes rose to approximately 25.6 million units in FY 2024–25, up from 23.9 million a year earlier.
• Utility vehicles and two-wheelers continue to see robust traction.
• Appliance and electronics demand remains supported by urbanisation and rising incomes.

For companies like Carlsberg A/S, Hyundai Motor Company, and LG Electronics, India is not merely a marginal geography. It is a structural consumption story.And investors are pricing that story accordingly.

Manufacturing Ambition: Policy-Driven Tailwinds

India’s growth thesis is also reinforced by policy.

Initiatives such as:

• Production-Linked Incentive (PLI) schemes
• The broader Make in India programme
• Employment-linked incentives
• The National Manufacturing Mission

Are designed to deepen domestic manufacturing capabilities across electronics, pharmaceuticals, automobiles, telecom equipment, and specialty steel. Electronics production targets alone have expanded dramatically, with policymakers aiming to scale the sector into a multi-hundred-billion-dollar industry.

For multinational firms, this reduces supply-chain concentration risk and offers an alternative production hub amid ongoing global realignments. Listing Indian subsidiaries in this context signals long-term commitment  – not short-term speculation.

FDI Momentum and Credit Confidence

India’s foreign direct investment (FDI) inflows have grown substantially over the past decade, rising from roughly $36 billion in FY 2013–14 to over $80 billion in FY 2024–25 (provisional).

Nearly 70% of cumulative FDI inflows over the past 25 years have occurred between 2014 and 2025 — illustrating sustained global confidence. Meanwhile, India’s sovereign credit rating upgrade to BBB by S&P Global Ratings reflects improved fiscal management and macroeconomic resilience.

For global boards evaluating risk-adjusted returns, these signals matter.

A stable macro backdrop, strong GDP growth projections near 6.5%, and structural reform momentum combine to create a favourable investment climate.

IPO Market Dominance: Global Context

India’s IPO market has not merely been active, it has been dominant. In 2024, India led globally in IPO volume, recording hundreds of deals and raising nearly $21 billion — almost three times the proceeds of the prior year.

Even in 2025, Indian markets rank among the top globally in capital raised via IPOs, behind only major financial centres such as the United States and Hong Kong.

Notably:

• IPO investments have frequently outperformed broader indices in recent quarters.
• Average listing gains have remained healthy.
• Smaller IPOs have delivered particularly strong post-listing performance.

This reinforces investor confidence in the primary market — creating a virtuous cycle where strong absorption capacity encourages more issuers.

India: From Production Base to Capital Hub

Taken together, these factors suggest that India’s appeal now extends beyond consumption and manufacturing. It is evolving into a capital formation hub.

Multinational corporations are no longer viewing Indian listings as peripheral events. They are strategic capital allocation decisions.

Which brings us back to the Korean wave – a cluster of listings that perhaps best illustrate how global companies are leveraging India’s valuation environment.

The Korean Case Study

If one country illustrates how multinational corporations are strategically leveraging India’s capital markets, it is South Korea. Over the past two years, Korean companies have taken centre stage in India’s IPO markets not merely as participants, but as record-setters.

Hyundai: The Benchmark

The listing of Hyundai Motor India marked a watershed moment. The company raised approximately $3.3 billion through what became India’s largest-ever IPO.

The structure was revealing. The offering was almost entirely an Offer for Sale, enabling its parent, Hyundai Motor Company, to monetise 17.5% of its stake while retaining strategic control.

The IPO was heavily oversubscribed, reflecting deep institutional appetite. Post-listing, Hyundai Motor India’s market capitalisation climbed significantly, reinforcing the argument that Indian markets were willing to assign a premium to a high-growth domestic auto franchise.

For the parent company, this was textbook capital optimisation:

• Unlock value.
• Retain majority ownership.
• Establish independent price discovery.
• Improve consolidated capital efficiency.

LG Electronics: The Valuation Gap on Full Display

The story repeated itself with LG Electronics India, the Indian arm of LG Electronics.

At listing, LG Electronics India was valued at a forward earnings multiple dramatically higher than its South Korean parent.

On debut, the stock surged sharply, temporarily pushing the Indian subsidiary’s market capitalisation close to – and at moments exceeding – that of its parent.

The numbers were sharp:

• The parent trades at single-digit forward P/E multiples.
• The Indian subsidiary commanded multiples several times higher.

Even though LG Electronics India generates a fraction of the global parent’s net income, investors priced it as a standalone growth vehicle embedded in a rapidly expanding consumer market.

The valuation divergence was no longer theoretical. It was visible on trading screens.

CJ Darcl: The Next in Line

The pipeline has not slowed.

CJ Darcl Logistics has filed draft papers for its own IPO, combining fresh equity issuance with an OFS component. The offering aims to support debt reduction and capital expenditure, including investments in electric vehicle fleets.

While smaller in scale compared to Hyundai or LG, the listing reflects the same broader thesis: Indian capital markets offer both liquidity and pricing support.

Korea’s Capital Strategy in India

Interestingly, South Korea does not rank among India’s largest FDI contributors in absolute terms. Yet Korean corporations have been disproportionately active in tapping Indian equity markets.

This suggests something important. The objective is not simply long-term operational investment – that has existed for decades. The shift is financial.

By listing Indian subsidiaries:

• Parents monetise a portion of their India growth story.
• They unlock capital at valuations that may exceed what is reflected in their domestic exchanges.
• They deepen brand visibility and local investor alignment.
• They create optionality for future capital raises within India.

In effect, India becomes not just a manufacturing or consumption destination but a financial platform.

A Replicable Model?

The Korean experience is increasingly viewed within banking circles as a replicable template for other multinational corporations.

The formula is straightforward:

• Build scale in India over decades.
• Allow the business to mature into a dominant domestic player.
• List a minority stake in a liquidity-rich market.
• Retain majority control.
• Benefit from valuation arbitrage.

This is precisely why Carlsberg’s potential IPO matters.

It signals that what began with automobiles and electronics may now extend into beverages, consumer goods, and beyond.

The question is no longer whether global companies will list Indian subsidiaries. The question is how long the valuation gap – between parent and subsidiary – can persist.

Sustainability or Stretch? Is India Overpaying for Growth?

The premium that Indian markets are assigning to multinational subsidiaries is striking. But history teaches that sharp valuation gaps rarely go unquestioned forever.

Is India witnessing a structural re-rating or a liquidity-driven stretch?

The answer may lie somewhere in between.

The Case for Sustainability

Supporters of the current premium argue that India’s growth trajectory justifies higher multiples. Unlike many developed economies facing ageing demographics and flat consumption curves, India continues to benefit from:

• A young population
• Rising middle-class expansion
• Urbanisation tailwinds
• Manufacturing incentives
• Expanding domestic capital pools

When a subsidiary like Hyundai Motor India or LG Electronics India is valued independently, investors are not pricing the global conglomerate – they are pricing India’s growth runway. From that perspective, the premium is not speculative excess. It is forward-looking capital allocation.

Moreover, domestic liquidity remains robust. Systematic Investment Plans continue to channel predictable monthly flows into equities. Institutional demand has demonstrated the ability to absorb even multi-billion-dollar IPOs without destabilising the broader market.

As long as earnings growth delivers, valuation support can hold.

The Case for Caution

Yet, there are reasons to temper exuberance.

Liquidity Sensitivity: Much of the valuation support stems from strong domestic liquidity. If market conditions tighten — due to global shocks, interest rate shifts, or risk aversion — multiples could compress quickly.

Growth Expectations Already Priced In: Indian subsidiaries are often debuting at elevated earnings multiples that leave little room for operational missteps.

Parent–Subsidiary Convergence Risk: If growth moderates, the sharp divergence between parent and subsidiary valuations may narrow over time.

Primary vs Secondary Divergence: Foreign institutional investors have been selective — often cautious in secondary markets while participating in primary issues. This suggests disciplined allocation rather than unconditional optimism.

In short, the premium works – until it doesn’t. That does not mean a correction is imminent. It simply means the margin for disappointment is narrower at elevated multiples.

The Structural vs Cyclical Debate

The key distinction lies in whether India’s capital market evolution is cyclical or structural.

If: Domestic financialisation continues, GDP growth remains near the 6–7% range, Policy stability persists, Corporate earnings deliver double-digit expansion, then India’s valuation premium may become a durable feature of global asset allocation.

But if liquidity slows or earnings underperform, the re-rating could reverse – testing the resilience of newly listed subsidiaries. For multinational corporations, however, the calculus is pragmatic. They are not betting on whether the premium lasts forever. They are monetising it while it exists.

And that brings us back to where this story began.

The Last Bit, What Carlsberg Really Represents

When Carlsberg A/S explores a potential $700 million listing of Carlsberg India, it is participating in something larger than a routine IPO. It is acknowledging a shift in global capital flows.

India is no longer merely a production base or a sales market. It is emerging as a pricing centre — a place where growth is independently valued, where liquidity is domestically anchored, and where multinational balance sheets can be optimised through strategic listings.

From automobiles to electronics to beverages, the playbook is becoming clearer: Build in India. Grow in India. List in India. Unlock value in India.

Whether the valuation gap ultimately narrows or persists, one reality is already evident: India’s capital markets are no longer peripheral to global corporate strategy. They are becoming central to it.

And Carlsberg’s proposed listing may well be the next proof of that transformation.