Hyundai Motor’s India unit is seeking regulatory approval for a stock market listing in Mumbai, which could be the nation’s largest and would see the South Korean parent sell up to 17.5% stake in the company. This IPO would mark the first car maker in India to go public in two decades, with Indian stock markets trading near record highs. Hyundai considers India to be a vital growth market, with significant investments made and commitments for further investing in the country.
The IPO from Hyundai’s India unit is expected to raise around $2.5 to $3 billion at a valuation of up to $30 billion, making it a significant offering. Without issuing new shares, the IPO will involve the South Korean parent selling part of its stake to retail and other investors through an “offer for sale” route. By going public, Hyundai aims to strengthen its position against competitors like Maruti Suzuki and Tata Motors, as it would make future fundraising easier and provide liquidity and a public market for its shares.
Indian Prime Minister Narendra Modi views the automotive industry as a key element in boosting economic growth, with government initiatives to incentivize local manufacturing, particularly of electric vehicles. Hyundai has been present in India for 28 years, providing affordable cars such as Santro and Creta, and plans to launch new electric vehicles, establish charging stations, and a battery pack assembly unit. The South Korean parent is set to sell up to 17.5% of the total shares in the IPO, with the aim of unlocking value for the Indian business and helping Hyundai remove its valuation discount compared to global and Asian peers.
Hyundai intends to focus on “premiumisation,” selling more expensive cars, increasing its EV market share, and adding charging stations to strengthen its position as an export hub. The company believes that the IPO will enhance visibility and brand image in India and provide liquidity for its shares. The timeline for the listing is yet to be confirmed, with the Securities and Exchange Board of India typically taking three to six months to approve, reject, or seek more information on IPOs. Hyundai is being advised on the IPO by prominent investment banks such as Citi, JP Morgan, and HSBC.
With the Indian stock indices showing significant growth over recent years and the Seoul KOSPI index rising at a slower rate, Hyundai is looking to capitalize on the momentum with its IPO. By listing shares in India, Hyundai aims to tap into the market potential and boost its presence in the country. The IPO would not only benefit Hyundai’s India unit but also help the South Korean parent company to improve its valuation standing globally. Through strategic investments and focus on key growth areas like EVs and premium cars, Hyundai is gearing up for a strong performance in the Indian market and beyond.
