Hyundai India files for IPO in potentially one of India’s biggest

The Indian arm of South Korean carmaker Hyundai Motor has filed draft papers with market regulator Securities and Exchange Board of India (Sebi) to sell 142 million shares, or a 17.5% stake, in an initial public offering (IPO).

“The objects of the offer are to carry out the offer for sale of up to 142,194,700 equity shares of face value of ₹10 each by the promoter selling shareholder aggregating and achieve the benefits of listing the equity shares on the stock exchanges,” the draft prospectus dated 14 June said.

Advisors for the share sale include Kotak Mahindra Bank, Citigroup Inc., JP Morgan Chase & Co, HSBC Holdings Plc and Morgan Stanley.

Citing unidentified company officials aware of the details, Bloomberg had reported that the automaker is looking to raise $2.5-3 billion from the IPO at a valuation of about $30 billion, making it one of the biggest share sales on record in the country.

Life Insurance Corp. of India’s $2.5 billion issue in 2022 is the biggest IPO in the country till date.

Hyundai’s share sale, with a potential listing planned by the end of the year, will also make it the first carmaker to go public after Maruti Suzuki’s did two decades ago in 2003.

Market leader Maruti Suzuki India Ltd has a market capitalization of around ₹4 trillion, or nearly $48 billion.

Hyundai, whose top-selling models include i20, Verna, Creta, Aura and Tucson, was the second largest automaker by passenger sales volumes in FY24 in India after Maruti Suzuki.

Shares of Hyundai jumped as much as 6.3% to 285,000 won (about $206) in Seoul on Monday, while those of Maruti’s parent Suzuki Motor Corp. fell as much as 5.1% in Tokyo.

Shares of Hyundai’s suppliers and subsidiaries also rose, with SL Corp. jumping as much as 14% while HL Mando Co. rose 5.2% and Kia Corp. increased 4.6%.

The local markets were shut on Monday on account of Bakrid.

Hyundai Motor said in a regulatory filing that its India unit had submitted IPO documents to the Indian regulator.

Hyundai said it “expects that listing of the equity shares will enhance our visibility and brand image and provide liquidity and a public market for the equity shares in India.”

The South Korean parent will sell part of its stake in the wholly owned India unit to retail and other investors through the offer for sale (OFS) route, and no new shares will be issued.

In its draft papers, the company said not more than 50% of the shares issued will be reserved for qualified institutional buyers, not less than 35% will be reserved for retail investors, and not less than 15% will be reserved for non-institutional investors.

Hyundai’s India unit had in FY23 reported a profit of ₹4,653 crore on a revenue of ₹60,000 crore.

India had accounted for around 13% of Hyundai’s international sales in 2023.

The Economic Times first reported on Hyundai India’s listing plans in February, following which its parent issued an official statement to the Korean Stock Exchange.