Hyundai Motor plans to raise up to $3 billion by selling a 17.5% stake in its Indian subsidiary through an IPO. The move aims to capitalize on India’s growing market, marking the first automaker IPO in over 20 years.
India (Bollywood Fever): In what could become India’s largest-ever IPO, South Korea’s Hyundai Motor intends to sell up to 17.5 percent of its stake in its Indian subsidiary through an initial public offering (IPO), according to draft papers filed with the Securities and Exchange Board of India (SEBI) on June 15. The company aims to raise between $2.5 and $3 billion from this share sale.
According to the SEBI filing, Hyundai Motor will offer up to 142 million shares for sale out of a total of 812 million. The IPO will not include the issuance of new shares; instead, Hyundai’s South Korean parent company will sell part of its stake in the wholly-owned Indian unit to retail and other investors via an “offer for sale” route.
This IPO would mark the first by an automaker in India in over two decades, following Maruti Suzuki‘s public listing in 2003. Hyundai is currently the second-largest carmaker in India, trailing only Maruti Suzuki India.
India ranks as Hyundai’s third-largest revenue source after the US and South Korea. The company is pursuing the IPO to capitalize on the growing market potential in India.
To facilitate its entry into public markets, Hyundai has enlisted investment banks including Kotak Mahindra, Citibank, Morgan Stanley, JP Morgan, and HSBC.
In terms of performance, Hyundai reported a 7 percent year-on-year increase in total sales, reaching 63,551 units in May, up from 59,601 units during the same period last year.
“We have maintained a healthy total sales volume in May 2024, despite a week-long routine bi-annual maintenance shutdown at our Sriperumbudur factory,” said HMIL COO Tarun Garg. He noted that SUVs accounted for more than 67 percent of domestic sales last month.
In April, Hyundai Motor India announced plans to introduce five new electric vehicles (EVs) by 2030, accelerating its “locally tailored” plans for the sector by two years. The company’s Chennai plant is expected to roll out Hyundai’s first electric SUV by the end of 2024.
Additionally, Hyundai India and Kia have signed an agreement with Exide Energy Solutions to explore local production of batteries for EVs. Currently, Hyundai Motor India sells two EV models in India: the IONIQ5 and the KONA Electric, priced around Rs 46 lakh and Rs 24 lakh (ex-showroom Delhi), respectively.
Last year, the company announced plans to launch more electric vehicles under the Hyundai and Kia brands in India. Hyundai is reportedly planning to invest Rs 20,000 crore over the next decade in Tamil Nadu to modernize vehicle platforms and expand its presence in the country’s rapidly evolving electric vehicle segment.
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