India-listed multinational arms outclass parent firms' valuations

Trend may draw foreign companies to India listing, while existing players assess potential of monetising stakes

It’s not only the Indian markets that command a valuation premium over their global peers; shares of subsidiaries of India-listed multinational companies (MNCs) also trade at rich valuations compared to their parent companies.

An analysis of 12-month forward price-to-earnings (P/E) and price-to-book (P/B) multiples of domestically listed MNCs shows that most quotes have a premium ranging from 2.1x to 6x that of their parent. Similarly, P/B, in most cases, is significantly higher in the domestic market.

Analysts suggest that this trend could encourage more foreign companies to firm up their plans for listing in India. Additionally, existing players may contemplate monetising