Hyundai Motor’s India unit has made a significant move by seeking regulatory approval for a stock market listing in Mumbai, potentially becoming the nation’s largest IPO. The South Korean parent company plans to sell a stake of up to 17.5% in the company, marking a major development in the country’s automotive industry.
This IPO would be a landmark event as it would make Hyundai the first car maker in India to go public in two decades since Maruti Suzuki in 2003. It comes at a time when Indian stock markets are reaching record highs, indicating a favorable environment for such a listing.
Hyundai views India as a crucial growth market, having invested $5 billion in the country with commitments for an additional $4 billion over the next decade. The company operates two manufacturing units in India, which is its third-biggest revenue generator globally, after China and the United States.
While the draft prospectus filed does not disclose the pricing details of the IPO or the company’s valuation, sources suggest that Hyundai aims to raise around $2.5 to $3 billion at a valuation of up to $30 billion. The IPO will not involve the issuance of new shares, as the South Korean parent plans to sell part of its stake through an “offer for sale” route.
Hyundai’s listing in India is expected to strengthen its position against competitors like Maruti Suzuki and Tata Motors, facilitating easier access to future fundraising without relying on its Korean parent company. The move is also anticipated to enhance the company’s visibility, brand image, and liquidity in the market.
Prime Minister Narendra Modi’s government has been actively promoting the automotive industry in India as a key driver of economic growth. With a focus on increasing local manufacturing, especially of electric vehicles, India offers a supportive environment for companies like Hyundai to expand their operations.
Having entered the Indian market 28 years ago, Hyundai has built a strong presence with popular models like Santro and Creta. The company is now set to introduce new electric vehicles, establish charging stations, and launch a battery pack assembly unit to further strengthen its position in the market.
The South Korean parent company plans to sell up to 142 million shares, or 17.5% of the total, through the IPO, although the final percentage could be lower. Hyundai aims to unlock value for its Indian business through this IPO and eliminate the valuation discount compared to its global and Asian counterparts.
Investment banks including Citi, JP Morgan, HSBC, Morgan Stanley, and India’s Kotak are advising Hyundai on the IPO, highlighting the significance of this listing in the Indian market. This development comes as benchmark Indian stock indices have outperformed their South Korean counterparts, signaling a strong investor interest in the Indian market.
