Valuations drawing MNCs to list Indian units: JPMorgan

Growth outlook, global appetite to invest in India are at an all-time high, says top executive

- Priyamvada C

Anu Aiyengar, global head of advisory and mergers & acquisitions at JPMorgan.

Valuations in the Indian markets are drawing global conglomerates with a significant presence in the country to list local subsidiaries and raise capital to fund their expansion, according to a top executive at JPMorgan.

"If you look at the valuation in India and the home country where the company (with a significant presence in India) operates, it’s safe to say that they should be evaluating options to list their subsidiary in the Indian market and take advantage of the valuations here," Anu Aiyengar, global head of advisory and mergers & acquisitions at JPMorgan, told Mint.

India’s valuations are at a premium to that of its emerging market peers. The benchmark Nifty 50 is trading at 23.12 times its earnings compared with 16.3 times for MSCI EM Index.

India saw its largest $3.3-billion initial public offering (IPO) when Korean automaker Hyundai Motor Co. listed its local subsidiary in one of the most highly anticipated offerings—the transaction was managed by JPMorgan. Fellow Korean company LG Electronics is also planning an IPO of its Indian arm. Moneycontrol reported last week that Danish multinational brewer Carlsberg A/S is also exploring taking its domestic arm public.