Hyundai Motor’s India unit sought regulatory approval on Saturday for a inventory market itemizing in Mumbai, which could possibly be the nation’s largest and can see the South Korean dad or mum promote a stake of as much as 17.5% within the firm.
The preliminary public providing (IPO) will make it the nation’s first automobile maker to go public in 20 years since Maruti Suzuki in 2003, and would come simply as Indian inventory markets are trading near record highs.
Hyundai counts India as an important development market the place it has two manufacturing models and has invested $5 billion, with commitments to pump in one other $4 billion over the subsequent decade. The world’s largest automobile market after China and the USA is the corporate’s third-biggest income generator globally.
The Hyundai draft prospectus filed gave no particulars of the pricing of the IPO or the corporate’s valuation, however sources have mentioned Hyundai goals to lift round $2.5 to $3 billion at a valuation of as much as $30 billion.
Hyundai, India’s second-biggest automobile maker behind Maruti Suzuki, won’t difficulty new shares within the IPO, which is able to contain its South Korean dad or mum promoting a part of its stake within the wholly owned unit to retail and different traders through a so-called “provide on the market” route.
The itemizing is seen placing Hyundai Motor India on a stronger footing versus Maruti Suzuki, Tata Motors and different rivals because it may make future fundraising simpler, with out the necessity to rely upon its Korean dad or mum.
Hyundai expects the itemizing of the fairness shares in India “will improve our visibility and model picture,” and “present liquidity and a public market” for the shares, the corporate mentioned within the draft prospectus filed on Saturday.
It didn’t present a timeline for the itemizing, however usually India’s markets regulator, the Securities and Change Board of India, takes three to 6 months to approve, reject or search extra info on IPOs.
The corporate mentioned it plans to give attention to “premiumisation” — promoting costlier automobiles, in addition to growing its EV market share and including charging stations, the place it lags behind Tata Motors. Hyundai India additionally mentioned it needs to ship extra automobiles, “strengthening” its place as an export hub.
Indian Prime Minister Narendra Modi sees the automotive business as a cornerstone to boosting development on this planet’s fifth-largest financial system. His authorities has constructed a whole lot of kilometers of new roads and is incentivising automobile makers to extend native manufacturing, particularly of electrical autos.
Hyundai entered India 28 years in the past and has gained over patrons with its inexpensive automobiles resembling Santro and sports-utility automobile Creta. The corporate has plans to launch new electrical autos, set up charging stations and a battery pack meeting unit.
The South Korean dad or mum will promote as much as 142 million of the overall 812 million shares, or 17.5%, within the IPO. The sources have mentioned the ultimate share could possibly be decrease.
With the IPO, Hyundai goals to unlock worth for the Indian enterprise and likewise assist the Korean automaker shed its valuation low cost in comparison with world and Asian friends.
Benchmark Indian inventory indices have doubled between 2019 and 2023, whereas Seoul’s KOSPI index has risen simply 30% over the identical interval.
Hyundai is being suggested on the IPO by funding banks Citi, JP Morgan, HSBC, Morgan Stanley and India’s Kotak.