Hyundai Motor’s India unit has filed for regulatory approval for a stock market listing in Mumbai, which would be the nation’s biggest and see the South Korean parent selling a stake of up to 17.5% in the company. This IPO would be the first for a car maker in India in two decades and comes at a time when Indian stock markets are trading near record highs. Hyundai considers India a crucial growth market and has invested $5 billion in the country, with plans to invest another $4 billion over the next decade. India is Hyundai’s third-biggest revenue generator globally, after China and the United States.
The Hyundai draft prospectus filed did not provide details about the pricing of the IPO or the company’s valuation, but sources suggest that Hyundai aims to raise around $2.5 to $3 billion at a valuation of up to $30 billion. This IPO does not involve the issuance of new shares, as the South Korean parent will be selling part of its stake in the wholly owned unit to retail and other investors through an “offer for sale” route. The listing is expected to strengthen Hyundai Motor India’s position against rivals such as Maruti Suzuki and Tata Motors, making future fundraising easier and less reliant on its Korean parent.
Hyundai expects that the listing of equity shares in India will enhance the company’s visibility and brand image, as well as provide liquidity and a public market for the shares. While no timeline was provided for the listing, the Securities and Exchange Board of India typically takes three to six months to approve, reject, or seek more information on IPOs. Hyundai’s plans for the future include focusing on selling more expensive cars, increasing its EV market share, establishing charging stations, and strengthening its position as an export hub.
Indian Prime Minister Narendra Modi views the automotive industry as crucial for boosting growth in India’s economy. The government has taken steps to incentivize car makers to increase local manufacturing, particularly of electric vehicles. Hyundai, which entered India 28 years ago, has gained popularity with affordable cars such as the Santro and SUV Creta. The company has plans to launch new electric vehicles, establish charging stations, and set up a battery pack assembly unit to further expand its presence in the country.
The South Korean parent will be selling up to 17.5% of the total shares in the IPO, with sources suggesting the final percentage could be lower. Hyundai aims to unlock value for its Indian business through this IPO and potentially help the Korean automaker reduce its valuation discount compared to global and Asian peers. With benchmark Indian stock indices doubling between 2019 and 2023, while Seoul’s KOSPI index rising only 30% over the same period, Hyundai is being advised on the IPO by investment banks Citi, JP Morgan, HSBC, Morgan Stanley, and India’s Kotak.
