India Is Quietly Becoming the World’s Valuation Magnet

The pricing hierarchy has inverted. 

A pronounced structural inversion is visible between Indian subsidiaries and overseas parents from Japan, South Korea and Europe. 

Hyundai Motor India provided an early signal. Its IPO was priced at 26 times earnings, while the parent traded at four times. LG Electronics India confirmed the pattern with market capitalisation crossing $13 billion, exceeding the parent’s $9.5 billion valuation. The IPO valued the subsidiary at ₹974 billion or $11.6 billion at 35 times earnings, while the parent traded at 8-9 times.

The divergence was visible at issuance, not just a trading‑day surge. Indian subsidiaries were worth more than parents.

These episodes reflect a structural force, valuation gravity.

India’s equity markets are emerging as valuation centres. Liquidity depth and pricing strength increasingly determine where capital is raised and ownership structured. Capital follows pricing power more than geography.

Over decades, this reshaping has expressed itself through successive shifts—valuation inversions, capital direction reversals, currency asymmetries, and mirrored migrations.

The first shift is valuation inversion between Indian subsidiaries and the overseas parents. In consumption-facing and energy-linked sectors, Indian markets assign materially higher multiples to subsidiaries than home markets assign to consolidated parents. More than 210 million demat accounts and monthly SIP inflows of ₹280 billion provide recurring absorption capacity. Liquidity has become structural.

The second shift is altering the nature of capital migration. Both transactions were offers for sale. Only financial capital migrated. Minority ownership localised domestically. Proceeds migrated to overseas parent balance sheets.

The third shift displays historical symmetry. In the 1990s, Infosys and ICICI Bank raised funds through American Depository Receipts. Ownership localised in the US. Indian companies took capital home. Capital proceeds migration mirrors across decades. Companies list where liquidity is deep, and pricing is strong. Proceeds migrate to parent jurisdictions.

The fourth shift is currency asymmetry. Proceeds converted at issuance remain in hard currency, while domestic commitments remain rupee-denominated. LG monetised $1.38 billion and Hyundai $3.3 billion. At ₹84 per dollar, commitments equated to $714 million and $5.36 billion. At ₹90, they declined to $667 million and $5 billion. Exchange rate movements alter balance-sheet arithmetic.

The fifth shift is domicile reversal. Indian-origin companies that incorporated overseas are reassessing their domicile. Razorpay completed reverse flip from the US to India. Incorporation geography is becoming secondary to valuation geography.

The sixth shift is venue reversal. Listing location adjusts to depth and valuation. Indian companies once raised capital through Global Depository Receipts in Luxembourg, then delisted as volumes thinned. Decades later, Standard Chartered mirrored this with Indian Depository Receipts, delisting when sustained depth failed. Venue follows liquidity and pricing support.

The seventh shift is selective persistence. In several sectors, the premium has endured. Maruti Suzuki has traded above Suzuki Motor Corporation for over a decade. Even without monetisation, valuation divergence persists where domestic growth visibility is strong. Siemens Energy India trades at 90 times earnings, its parent 60–75. Carlsberg is evaluating listing its Indian operations, reflecting monetisation rather than capital need.

The eighth shift concerns exchange performance, underscoring the distinction between liquidity and pricing power. Both London and Singapore exchanges retain depth, yet valuation differentials influenced issuer decisions. In Singapore, delisting prompted policy responses.

The present phase sits within a longer arc. 

In the 1970s, Foreign Exchange Regulation Act‑mandated dilution reduced foreign ownership in India. Coca‑Cola and IBM chose exit over compliance. Then localisation was regulatory. Today, localisation is voluntary and valuation-induced.

The signal now comes from multiples, not mandates.