by Multinational Corporations Discover IPO Goldmine in India’s Optimistic Market
In a development that financial analysts are calling “peak bubble behavior,” multinational corporations are racing to list their Indian subsidiary operations through IPOs, banking on the country’s enthusiastic retail investors who have demonstrated a remarkable ability to buy stock in literally anything.
The IPO boom has seen Korean electronics manufacturers, American fast-food chains, and European pharmaceutical companies all lining up to sell shares in their Indian operations to local investors who view “subsidiary of a multinational” as synonymous with “guaranteed riches.”
“We’re essentially taking our Indian division, which reports to our headquarters in Seoul, slapping ‘India’ on it, and watching retail investors throw money at us,” explained CFO Park Jin-woo of a major Korean conglomerate, speaking off the record. “It’s like they’ve never heard of the concept that a subsidiary’s profits ultimately go to the parent company.”
According to Dr. Rajesh Mehta, Professor of Market Euphoria at the Mumbai School of Questionable Financial Decisions, the trend represents a perfect storm of regulatory enthusiasm and investor optimism. “SEBI has made it relatively easy to list, and Indian retail investors have made it absolutely certain that any IPO will be oversubscribed, regardless of fundamentals, business model, or the fact that they’re buying a minority stake in someone else’s subsidiary.”
The listings have been particularly popular among investors who failed to get in on earlier IPOs and are desperate not to miss “the next big thing,” even if that thing is literally just the Indian branch of a global coffee chain that sends most of its profits abroad.
Investment bankers have celebrated the trend, noting that convincing people to buy stock in subsidiaries represents a new frontier in creative finance. “It’s not quite a scam,” explained one banker who requested anonymity. “It’s more like optimistic accounting meets aggressive marketing meets a population that really wants to believe in the stock market.”
Parent companies have assured investors that their Indian subsidiaries are “strategic assets” while quietly noting in the fine print that they retain control over all major decisions, can change management at will, and reserve the right to shut down operations if India becomes inconvenient.
SOURCE: Bohiney.com (Radhika Vaz)
