Here’s a non exhaustive list of Indian MNCs along with their unlisted subsidiaries. Price to sales assumption marked in red to give a sense of what the ballpark valuation could’ve been if the unlisted were actually listed (1/9)

Few observations:

Abbott’s unlisted sub is bigger in size than the listed one and has brands such as Pediasure and Ensure. Don’t get fooled by the reported loss. These are due to high interest costs paid to the parent (2/9)

Pfizer has not one but two unlisted subsidiaries. It used to trade at a discount to GSK at one point in time due to this ‘corporate governance’ issue. Long forgotten now (3/9)

AstraZeneca runs its global medicines development, business services etc via its unlisted subsidiary (4/9)

Sanofi’s speciality is vaccines. But not in India. Entire vaccine division comes under Sanoti Pasteur India Pvt Ltd (5/9)

Procter & Gamble Home Products with brands such as Ariel, Tide, Pampers, Olay, H&S, Pantene etc is arguably the biggest unlisted Sub. If listed, would’ve easily had a higher market cap than the listed PGHH (6/9)

Nestle launched its pet food business via Purina Petcare India Pvt Ltd. This is the first time Nestle has entered an entirely new business segment in India on its own since entering the market in 1912 (7/9)

Why is this relevant? This continues to be an under rated risk for listed MNCs. An Indian promoter launching a new category in another entity would be dubbed as a ‘corporate governance’ issue (8/9)

‘New India’ requires new product categories. They may well be launched via the unlisted subs leaving minority shareholders of listed subs get the short end of the stick (9/9)