In a move that could reshape India’s automotive landscape, Hyundai Motor India has filed draft papers with SEBI for what could be the country’s largest-ever initial public offering (IPO), aiming to raise between $2.5 billion to $3 billion. This IPO, set to offload up to 17.5 percent of its stake, marks a significant milestone as it would be the first by an automaker in India in over two decades, following Maruti Suzuki’s IPO back in 2003.
Hyundai’s decision to go public is not just a financial strategy but a bold bet on the burgeoning potential of the Indian market. As the second-largest carmaker in India, following Maruti Suzuki, Hyundai’s presence is formidable, making its IPO a landmark event. The offering will see Hyundai’s South Korean parent company selling part of its stake through an “offer for sale” route, without issuing new shares. This move is designed to provide liquidity to its investors and to tap into the growing interest from retail and institutional investors.
India is a critical market for Hyundai, being its third-largest revenue generator after the US and South Korea. The company’s push for an IPO underscores its confidence in the Indian market’s growth potential. With a steady increase in sales, Hyundai reported a 7 percent year-on-year rise in May, selling 63,551 units compared to 59,601 units in the same month last year. This performance comes despite a week-long routine maintenance shutdown at its Sriperumbudur factory, highlighting the brand’s robust sales momentum.
SUVs are driving Hyundai’s growth in India, constituting over 67 percent of its domestic sales in May. This trend aligns with the global shift towards SUVs, and Hyundai is keen to capitalize on this with its range of models. Additionally, the company has ambitious plans for the electric vehicle (EV) segment. Hyundai Motor India announced earlier this year that it will launch five new EVs by 2030, accelerating its timeline by two years. The first of these electric SUVs is slated to roll out from its Chennai plant by the end of 2024.
To ensure a smooth entry into the public markets, Hyundai has enlisted the expertise of major investment banks, including Kotak Mahindra, Citibank, Morgan Stanley, JP Morgan, and HSBC. These banks will play a crucial role in navigating the complexities of the IPO process, ensuring its success and maximizing investor interest.
This IPO is not just about raising funds; it’s a statement of Hyundai’s long-term commitment to India. By listing on the Indian stock exchanges, Hyundai is positioning itself to leverage the market’s growth, enhance its brand visibility, and attract more investment. It also sends a strong signal to global investors about the potential and stability of the Indian automotive market.
As Hyundai takes this significant step, it will be interesting to see how it influences the market dynamics and whether other automakers will follow suit. For now, Hyundai’s IPO is a major development, promising to bring new opportunities and set a new benchmark for corporate governance and market dynamics in India. The countdown to Hyundai’s debut on the stock market is on, and it’s a moment that the entire automotive industry and investors are watching closely.