New Delhi: Hyundai Motor India Ltd. (HMIL) is set to file draft papers for its initial public offering (IPO) with the market regulator by Friday evening. This move could potentially mark the largest share sale in Indias history.
Initial feedback from bankers suggests that the IPO could raise between $2.5 billion and $3 billion. The draft prospectus will outline the companys growth strategy, including product development and market expansion. Previously, the Life Insurance Corporation of Indias IPO, which raised 20,557 crore ($2.46 billion) in May 2022, was the largest in the country.
A spokesperson for Hyundai declined to comment on the matter.
As Indias second-largest carmaker after Maruti Suzuki, HMIL recently hosted analysts at its Chennai manufacturing facility to commence its IPO process. With Tata Motors projecting a market share increase of up to 6% by 2030, investors and analysts will scrutinize how HMIL, which derives over 60% of its sales from sports utility vehicles (SUVs), is positioned in the competitive market landscape.
The IPO is a significant milestone for HMIL, aiming to list alongside established automotive giants in India. The offering in one of the worlds fastest-growing automotive markets will also enhance the companys market value, aligning with the South Korean governments corporate value-up program, which encourages companies to pursue foreign listings to boost valuations and increase shareholder returns.
HMIL, which has been preparing for the IPO for months, is poised to make a substantial impact on the Indian financial market. This will be the first IPO by an automaker in India since Maruti Suzuki India Limiteds listing in 2003, and it is expected to be one of the largest IPOs in Indias history.
India represents Hyundais third-largest revenue market after the US and South Korea. The company is leveraging the IPO to capitalize on Indias growing market potential. Hyundais Executive Chair Euisun Chung and CEO Chang Jae-Hoon visited India in April for meetings related to the IPO. Hyundai has been operating in India since 1997, with manufacturing facilities in Tamil Nadu and an upcoming plant in Talegaon (Maharashtra).
Following the filing of the Draft Red Herring Prospectus (DRHP), the market regulator is expected to take two months for final approval, after which HMIL can proceed to list on the Indian stock exchange. Hyundai has enlisted investment banks such as Kotak Mahindra, Citibank, Morgan Stanley, JP Morgan, and HSBC to facilitate a smooth and successful public market entry.
Analysts estimate that HMIL is targeting a valuation of $22-$28 billion for the Indian IPO, involving the sale of 15-20 percent of the parent companys stake as an offer for sale.
