MNC listing in India has a strong message on market depth, resilience

LG Electronics India had a blockbuster listing this week, with over 50 per cent gains compared to the issue price, after witnessing a significant investor interest during the issue period. With the issue, LG Electronics has joined a host of multinational  corporations (MNCs) listed in India. Hyundai Motor India was listed last year with an issue size of over ₹27,000 crore. These large and popular listings underscore the kind of change India has witnessed over the past several decades. In the 1970s, for example, the government was forcing Indian arms of MNCs to dilute capital. As a result, names like Coca-Cola and IBM exited the market. For several years, there was also a trend among international companies to take their Indian subsidiaries private due to the apparent burden of listing requirements. But now large companies are voluntarily listing in India, a development that must be welcomed. Although these are largely issues of offer for sale, with no fresh capital being raised for the India business, they still send a powerful signal. 

The successful listing of large issues indicates the depth of the Indian equity market. It is also worth noting that the depth is being created by the increasing pool of domestic savings routed partly through mutual funds. Domestic institutional investors, for instance, have pumped in about ₹6 trillion into the equity market so far in 2025. The flow of retail money, particularly through systematic investment plans, is not only reducing India’s dependence on foreign institutional investors in the secondary market but also supporting activity in the primary market. Firms raised over ₹85,000 crore thus far in the primary market in 2025 on top of over ₹1.5 trillion in 2024.      

The visible vibrancy in the capital market will not only improve the ease of raising capital in the public market, but it will also encourage activity in the private space because large investors, such as private equity funds, will be able to exit through the public market at an appropriate time. A vibrant and deepening market will also attract more foreign investors over the long run because of the increased availability of quality companies. 

MNCs are encouraged to list in India partly because of the kind of valuation they are getting. The data shows that the market value of some Indian subsidiaries is higher than that of their parent companies, and they command much higher earnings multiples in India. LG Electronics, for instance, has a market value of over $12 billion, compared to about $9.4 billion in its home market. From the MNCs’ point of view, listing not only helps unlock value, it also improves visibility and brand valuation, which will help the core business over time. This will benefit investors, who will have an opportunity to buy quality businesses growing in India. The successful listing of LG and Hyundai might encourage other MNCs, such as Samsung and Pepsi, to list their businesses in India. The availability of funds for quality businesses may also nudge some new-age large ecommerce businesses to list. At a macroeconomic level, capital-market activity clearly indicates that the availability of risk capital is not an issue for private investment. Policymakers thus need to address other impediments that are holding a durable revival in private investment, which is a must to sustain higher growth over the medium term.