Hyundai Motor India files for record $3b IPO

Hyundai Motor India has officially submitted an initial public offering application to the Securities and Exchange Board of India to raise approximately $3 billion, potentially setting a record as the largest IPO in the country’s history.

On Monday, Hyundai confirmed in a corporate disclosure that it has submitted a Draft Red Herring Prospectus to SEBI, initiating the IPO process for Hyundai Motor India Ltd., its local subsidiary.

It marks a significant step in expanding both Hyundai’s production capacity and market presence in India, the world’s third-largest automotive market.

The proposed IPO will involve the sale of 17.5 percent of Hyundai Motor India's shares, without issuing new shares, and is expected to generate around $3 billion. This would make it the largest IPO in Indian history, surpassing the Life Insurance Corp. of India's $2.5 billion IPO in 2022.

India’s IPO review period typically ranges from three to six months, indicating that Hyundai's IPO could be completed by the end of the year.

However, a Hyundai official in Seoul noted that the final listing date will depend on market conditions and initial demand assessments.

Speculation regarding Hyundai’s plan to list its Indian subsidiary has been ongoing since February, but this is the first official acknowledgment from the company. Following the announcement, Hyundai's stock on the Korea Exchange saw a significant increase, trading at 283,500 won as of 9 a.m. on Monday -- up 15,000 won or 5.78 percent from the previous trading day, reaching a new 52-week high.

“Given that Hyundai Motor India is anticipated to raise approximately $3 billion from the IPO, its market capitalization could reach up to $17.1 billion,” said Lee Jae-il, an analyst at Eugene Investment & Securities specializing in the electric vehicle and mobility sectors.

The money raised from an IPO could help Hyundai Motor India challenge Maruti Suzuki’s dominance in the Indian market. Maruti Suzuki, a joint venture established in 1982 between Suzuki and the Indian government, went public in 2003, raising $200 million then, and has since grown to a market capitalization of $48.3 billion.

Last year, Maruti Suzuki commanded a 41 percent share of the Indian market by volume, selling 1.7 million units, while Hyundai Motor India holds the second position with a 15 percent share, with 600,000 units sold.

Hyundai Motor India’s outlook is promising due to several key factors. Hyundai’s new Talegaon auto plant in India, with an annual production capacity of 1.4 million units, is set to begin operations in 2025, while the company’s average selling price and profitability in the Indian market are on an upward trajectory, driven by an increasing share of sport utility vehicles in its sales mix.

Hyundai’s plans to enter the Indian EV market with an electric version of the popular Hyundai Creta SUV by 2025 also position the company to become a significant player in the growing electric vehicle segment.