Hyundai Motor’s India unit has officially filed for an initial public offering (IPO) for a stock market listing in Mumbai, marking a significant move that could become India’s biggest IPO to date. The South Korean parent company plans to sell a stake of up to 17.5% in the Indian subsidiary. This IPO would make Hyundai Motor India the first carmaker to go public in the country in two decades since Maruti Suzuki in 2003. The strategic decision comes at a time when the Indian stock markets are soaring near record highs.
Hyundai has established India as a key growth market, having already invested $5 billion in the country, with additional commitments to inject $4 billion over the next decade. India stands as the company’s third-largest revenue-generating market globally, following China and the United States. While the draft IPO prospectus does not disclose specifics regarding stock pricing or the company’s valuation, sources suggest that Hyundai is aiming to raise approximately $2.5 to $3 billion at a valuation of up to $30 billion.
In a noteworthy move, Hyundai’s IPO in India will not involve the issuance of new shares, as the South Korean parent will sell part of its stake in the Indian unit to retail and other investors through an ‘offer for sale’ route. This listing is expected to sturdy Hyundai Motor India’s position against competitors like Maruti Suzuki and Tata Motors, potentially facilitating future fundraising independently without relying solely on its Korean parent company.
By going public, Hyundai anticipates bolstering its brand visibility and image in India, while also offering liquidity and a public market for its shares. The company aims to concentrate on ‘premiumisation’ by focusing on selling high-end cars, increasing its electric vehicle market share, and expanding charging station infrastructure. Additionally, the IPO will enable Hyundai to enhance its presence as an export hub, shipping more vehicles in the global market.
Hyundai’s decision to tap into India’s capital markets has drawn attention as the automaker aims to unlock value within its Indian business and elevate its standing compared to global and Asian competitors. The company is being guided through this process by esteemed investment banks such as Citi, JP Morgan, HSBC, Morgan Stanley, and India’s Kotak. As the Indian markets regulator typically takes three to six months to approve, reject, or request more data on IPOs, the timeline for the IPO listing has not been specified yet. This strategic move highlights Hyundai’s commitment to the Indian market’s growth potential and its vision to evolve its operations in the region.
