Hyundai Motors India Plans Biggest IPO Ever at a valuation of $22-28 billion : Report

Hyundai Motor Company from South Korea is exploring the possibility of listing its local unit to tap into India’s growing IPO market, as per informed sources. This potential move, nearly three decades after the inception of Hyundai Motor India (HMIL), has the potential to become India’s largest initial public offering. HMIL secured the position of India’s second-largest seller of passenger vehicles last year, trailing behind Maruti Suzuki India.

Hyundai Motor India Ltd (HMIL), the Indian subsidiary of South Korea’s Hyundai Motor Co, is gearing up to initiate its initial public offering (IPO, potentially becoming India’s largest ever, according to report. The IPO is slated for launch around Diwali, between September and November this year, following bankers’ valuation of HMIL at $22-28 billion, as reported.

After nearly three decades since Hyundai entered the Indian market, the South Korean auto company is reportedly considering a listing in the country.

 If the IPO materializes, it could become India’s largest, surpassing LIC’s record of ₹21,000 crore in issue size, as per report.

Asia Pacific has seen the majority of IPO debuts this year, with India’s equity market leading in listings compared to other regional peers.

 According to report, investment banks were in Seoul last week to finalize the listing plan for India’s second-largest passenger vehicle seller, following Maruti Suzuki. Bankers anticipate India to remain one of the region’s most active markets in the coming year.

Bankers have reportedly assessed the company’s value at $22-28 billion. Hyundai Motor Co, listed in South Korea with a market cap of $39 billion, is considering a Diwali listing in India.

The potential India listing is said to be part of South Korea’s ‘value-up’ program.

Inspired by Japan’s corporate reforms, which contributed to its stock rally, Korean financial regulators are contemplating actions to publicly identify companies that don’t implement improvement measures.

They are also exploring an indicator to gauge companies’ reform initiatives. Hyundai has established a sales growth target of 4% to 5% for 2024, with a planned total investment of 12.4 trillion won this year. This includes 5.6 trillion won for capital expenditure and 4.9 trillion won for research and development.

Hyundai’s Expansion Plans in India

Hyundai, the second-largest carmaker in India, is intensifying its focus in the South Asian nation and the United States. This strategic move follows a reduction in production in China due to prolonged losses and an exit from Russia, where it sold its two plants.

Hyundai, present in India for over two decades, stands out as the sole foreign player to establish dominance alongside market leader Maruti Suzuki, as others like Ford and General Motors folded their India business.

Hyundai’s market share in India, peaking at nearly 20%, is attributed to its diverse range of small cars and understanding of consumer preferences. However, it faces increasing competition from domestic players like Tata Motors (TAMO.NS), which has introduced a series of new SUVs and electric cars.

Hyundai currently holds a 15% share in the Indian car market, with 567,000 vehicles sold in the last fiscal year. Talks of Hyundai’s India unit IPO coincide with Tesla’s entry plan into India.

If Hyundai’s unit goes public, it could enhance its competitiveness against Tesla in the Indian EV market. Hyundai’s investment plan of nearly $4 billion over the next decade includes launching new EVs, charging stations, and a battery pack assembly unit.

A portion of this investment is directed at acquiring a former GM plant to facilitate Hyundai’s production expansion.

Presently, Hyundai manufactures cars in the southern Indian city of Chennai, often referred to as the Detroit of Asia.

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