Hyundai plans record-breaking IPO in India, eyes $3 bn raise

Hyundai Motor’s Indian division has made a bold move, seeking regulatory approval for a stock market listing in Mumbai, a decision that could result in the largest IPO in India’s history. The South Korean automotive giant plans to sell up to 17.5% of its stake in the Indian unit through this offering.

If successful, this IPO will mark the first time a car manufacturer has gone public in India in two decades, following Maruti Suzuki’s listing in 2003. This move comes at a time when Indian stock markets are nearing record highs.

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Hyundai, with two manufacturing plants and an investment of $5 billion already in place, has committed an additional $4 billion over the next decade. This shows India’s importance as Hyundai’s third-largest revenue generator globally, after China and the United States.

The draft prospectus filed by Hyundai did not disclose specific pricing or valuation details. However, a Reuters report stated that the company aims to raise between $2.5 billion and $3 billion, with a potential valuation of up to $30 billion.

In the proposed IPO, Hyundai Motor India, the country’s second-largest carmaker behind Maruti Suzuki, will not issue new shares. Instead, its South Korean parent company will sell a portion of its stake to retail and other investors through an “offer for sale” route.

The listing is expected to bolster Hyundai Motor India’s position against competitors like Maruti Suzuki and Tata Motors, making future fundraising efforts more accessible without relying on its parent company in Korea.

“Listing the equity shares in India will enhance our visibility and brand image,” Hyundai stated in the draft prospectus. “It will also provide liquidity and a public market for the shares.”

While no specific timeline has been given for the listing, it typically takes India’s market regulator, the Securities and Exchange Board of India, three to six months to process IPO applications.