In May last year, jaws dropped when British FMCG heavyweight Unilever Plc proposed to add to a 22.5 percent stake to its then-52 percent ownership in its Hindustan Unilever subsidiary at a 20 percent premium to the existing share price.
The open offer, which ended up being the biggest-ever in the country's history at Rs 19,000 crore, was a turning point for share purchases by foreign companies in their Indian subsidiaries.
In the current financial year, as many as 14 multinational corporations have come out with open offers to raise their ownership in their Indian units, a report by Mint says.
Several parent multinationals have also announced to buy out the remaining public stake and delist them, hoping to have greater control on the operations away from the public eye, as well as doing away with the need to share their profits.
"One thing which is common all across is reinforcement of faith in Indian growth story. Indian growth story is attractive and that is the reason why so much of foreign direct investment is coming into India," HSBC's investment banker Sunil Sanghai told CNBC-TV18 in an interview in December.
The bullishness of MNCs on the Indian companies bears a stark contrast to the largely negative tone that has been popularly prevailing on the Indian economy, businesses and stocks.
But unlike the "hot" portfolio money that finds its way into the country in a bid to make quick short-term returns, multinationals are in for the long haul.
"The way these corporate look at it: they have an existing subsidiary in India. They control that; they have been operating it for many years. Some of them have been operating it for even 100 years," Sanghai said.
"Therefore, they know the company. They know the management. They know the business. There are no diligence issues and therefore it makes sense for them to increase the stake and increase the economics of their overall investment."
Factors such as the rupee depreciation, easy availability and lower cost of capital in their home countries provide a good opportunity for them to increase stake in overseas subsidiaries, SMC Investments CMD DK Aggarwal wrote in an Economic Times column recently.
The rupee has depreciated sharply against the US dollar from the 45-50 levels it largely traded in during the previous decade, while excess cash sitting on corporate-balance sheets fetches a very nominal yield in the rich countries.
The Reserve Bank of India decision in September last year to allow foreign promoters to buy stakes in their Indian arms without its permission (up to 5 percent) also helped.
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