1. Landmark IPO Filing
Hyundai Motor’s India arm has filed preliminary papers with the Securities and Exchange Board of India (Sebi) for a colossal Rs 25,000 crore public offering. This marks the first time an automaker has filed for an IPO in India in 20 years, following Maruti Suzuki’s public listing in 2003.
2. Significant Stake Sale
The South Korean parent company plans to sell up to 17.5% of its stake in Hyundai Motor India through an “offer for sale” method. This involves selling shares to retail and institutional investors, with no new shares being issued. The sale will involve up to 14.2 crore equity shares out of a total of 81.22 crore shares.
3. Enormous Valuation
The IPO is expected to value Hyundai Motor India at around Rs 1.5 lakh crore. Although the draft prospectus does not specify the IPO pricing, media sources indicate that Hyundai aims to raise between $2.5 billion and $3 billion, potentially valuing the company at up to $30 billion. If successful, this IPO could become one of India’s largest, second only to the Life Insurance Corporation of India’s $2.5 billion offering in 2022.
4. Objectives of the IPO
Hyundai aims to enhance its visibility and brand recognition in India through this IPO. The listing is intended to create liquidity and establish a public market for Hyundai’s shares. This move is also designed to unlock the value of Hyundai’s Indian operations, helping the Korean automaker address its valuation gap compared to global and Asian competitors.
5. IPO Reservation and Lead Managers
The IPO will have specific reservations: no more than 50% of the issued shares will be allocated to qualified institutional buyers (QIBs), at least 35% will be set aside for retail individual investors (RIIs), and a minimum of 15% will be reserved for non-institutional investors (NIIs). The lead managers for the offer are Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), JPMorgan India, and Morgan Stanley India. KFin Technologies is responsible for the issue’s registration.
6. Financial Performance
Hyundai Motor India Limited is the second-largest car manufacturer in India, after Maruti Suzuki, in terms of passenger vehicle sales for FY24. In FY23, Hyundai’s Indian division reported revenues of Rs 60,000 crore and profits of Rs 4,653 crore, making it the most profitable among non-listed car manufacturers in the country.
7. Expansion and Investment Plans
Hyundai has been in India for 28 years and has built a strong presence with popular models like the Santro and Creta. The company is now focused on expanding its operations, particularly in the electric vehicle sector. Hyundai plans to boost its annual production in India to one million units by 2025, with significant investments in manufacturing affordable electric vehicles, building charging stations, and establishing a battery pack assembly unit. The company has already invested $5 billion in its Indian operations and has committed to an additional $4 billion over the next decade.
