Hyundai India plans to raise $3 billion via IPO

Looks at a valuation of $18-20 billion, will dilute 15-20% stake

Hyundai India, Hyundai India IPO, IPO news, market news
Hyundai Motor Group's executive chair Euisun Chung reportedly made a visit to India last month to review the firm's mid to long-term strategies. (Reuters)

South Korean auto major, Hyundai Motor Company’s, Indian arm Hyundai Motor India (HMIL), is close to filing its draft red herring prospectus with the Securities and Exchange Board of India to raise around $3 billion via an initial public offer (IPO).

Industry sources said that the company is targeting a valuation between $18-20 billion and may dilute 15-20% stake. There will be no issuance of new shares and the company plans to use the proceeds from the IPO to expand its operations.

When contacted an HMIL spokesperson declined to comment. However, in February when reports of an IPO had first surfaced, Hyundai Motor Co had issued an official statement to the Korean Stock Exchange. It had said that as a global company, it is constantly reviewing various activities, including listing overseas subsidiaries, to increase corporate value, but nothing has been confirmed to date.

Hyundai Motor Group’s executive chair Euisun Chung reportedly made a visit to India last month to review the firm’s mid to long-term strategies.

If Hyundai’s IPO materialises, it would be the largest in India, surpassing LIC’s share sale of around $2.5 billion in May, 2022.

The development will also mark a major milestone for the Indian industry, as it will be the first auto major to go for an initial share sale in over two decades, after Japan’s Maruti Suzuki’s listing in 2003.

Earlier this week, electric two-wheeler company Ola Electric also received Sebi’s clearance to raise funds through an IPO.

Hyundai Motor India is the second largest passenger vehicle manufacturer in the country after Maruti Suzuki India. The share price of Maruti Suzuki has risen by 24.35% in the last six months, and it has a market cap of around Rs 4,00,000 crore or nearly $48 billion.

Industry sources said that Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital and Morgan Stanley are the investment banks advising Hyundai on the transaction with law firm Shardul Amarchand Mangaldas acting as the company counsel.

Hyundai Motor India commenced operations in India in 1996 and currently, sells 13 models across segments. i20, Verna, Creta, Aura and Tucson are some of its major brands.

The company ended FY23 with revenues of Rs 60,000 crore and profits of Rs 4,653 crore, the highest amongst the non-listed car manufacturers in the country. It clocked the highest-ever domestic sales in 2023, crossing the 600,000-mark. India accounted for around 13% of Hyundai’s global sales in 2023.

Hyundai Motor India reported a 7% year-on-year increase in total sales at 63,551 units in May against 59,601 units in the corresponding month last year. Domestic sales during the month was up 1% to 49,151 units last month from 48,601 units in the year-ago period. The company’s SUV segment has emerged as a key driver, with a market share of around 67% in May.

Exports grew 31% in May to 14,400 units compared to 11,000 units a year ago.

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This article was first uploaded on June fourteen, twenty twenty-four, at forty-eight minutes past eight in the night.
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