Hyundai Motor India Limited (HMIL), the Indian arm of South Korean auto giant Hyundai Motor Co, is gearing up to launch a massive $3 billion IPO, which could become the largest initial public offering (IPO) in India’s corporate history. This offering is set to surpass the previous record held by the $2.7 billion IPO of Life Insurance Corporation (LIC) in 2022.
India’s market regulator SEBI has given the green light for the IPO expected to launch in October after reviewing the draft papers filed by Hyundai in June. Once finalized, this IPO, structured as an Offer for Sale (OFS) by the promoter, will not only mark Hyundai’s debut on the Indian stock exchanges but will also make it India Inc.’s largest-ever IPO.

Key details of Hyundai Motor India’s IPO

IPO size: Hyundai Motor India is aiming to raise around $3 billion through its IPO, with a target valuation ranging between $18 billion and $20 billion.

Offer structure: The IPO involves the sale of 142,194,700 equity shares with a face value of ₹10 each by the Promoter Selling Shareholder.

Strategic benefits: Hyundai expects the listing to enhance its visibility, brand image, and provide increased liquidity in the Indian market.

As of FY24, Hyundai Motor India was the second-largest car manufacturer in India, trailing only behind Maruti Suzuki in terms of passenger vehicle sales. Hyundai offers a diverse portfolio of 13 models, including sedans, hatchbacks, SUVs, and battery electric vehicles (EVs), and has played a crucial role in India’s automotive export market.

Hyundai has been the second-largest auto original equipment manufacturer (OEM) in India’s passenger vehicle market since Fiscal 2009. The company has been India’s largest exporter of passenger vehicles since Fiscal 2005, contributing significantly to Hyundai Motor Co’s global sales, with its share rising from 15.48% in 2018 to 18.19% in 2023.

Hyundai’s planned IPO comes at a time when its main competitor, Maruti Suzuki, has seen a 20.25% rise in share prices over the past year, with a market cap of approximately ₹4,00,000 crore ($48 billion). The listing of Hyundai’s Indian arm is expected to attract significant investor attention, potentially altering the competitive landscape in India’s automotive sector.

While Hyundai’s IPO is poised to make a significant impact, it comes amid an environment of geopolitical shocks and supply chain disruptions that could affect global commodity prices. The current account deficit is expected to widen, adding to the challenges for the Indian economy. However, Hyundai’s strong position in both domestic sales and exports provides a stable foundation for its future growth.

With SEBI’s final approval, Hyundai’s much-anticipated $3 billion IPO is set to not only break records but also further strengthen the company’s standing in the Indian automotive market and beyond

Hyundai Motor India Limited (HMIL), the second-largest carmaker in India after Maruti Suzuki in FY24 based on passenger sales volumes, is gearing up for a monumental IPO. The company has invested $5 billion in its two manufacturing units in India, which remains its third-largest revenue market. Hyundai expects the IPO to enhance its visibility and brand image in India. Additionally, the listing will provide liquidity and create a public market for its shares.

Hyundai Motor India’s arm is set to file draft papers with SEBI, targeting to raise $3 billion through an initial public offering (IPO) at a valuation between $18 billion to $20 billion. The South Korean parent company plans to sell up to 142 million shares, representing a 17.5% stake in its Indian subsidiary through the “offer for sale” (OFS) route. If successful, this will surpass the previous record set by LIC’s $2.7 billion IPO in 2022.

The company ended FY23 with revenue of Rs 60,000 crore and profits of Rs 4,653 crore, the highest among non-listed car manufacturers in India. Hyundai Motor India is a major player in the Indian automotive market, contributing around 13% to Hyundai’s global sales in 2023. Popular models include the i20, Verna, Creta, Aura, and Tucson. Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital, and Morgan Stanley are advising on the transaction. HMIL achieved its highest-ever domestic sales in 2023, crossing the six-lakh mark.

The IPO is expected to draw significant attention from investors, given Hyundai’s strong performance and market position. This IPO could redefine the Indian automotive market landscape, providing Hyundai with the capital to expand and innovate further.