Hyundai Motor India, the Indian arm of auto industry giant Hyundai Motor, is set to conduct the country’s largest initial public offering to date. The automotive company has submitted draft documents to SEBI and has now received approval from the market regulator. The company plans to raise $3 billion (approximately Rs. 25,000 crore) from the Indian stock market through the IPO. Prior to this, India’s biggest IPO champion was Life Insurance Corporation of India (LIC).
The records so far are all in the name of LIC
The largest issuance record in the history of the Indian IPO market was achieved in the name of LIC. LIC has launched an IPO and plans to raise $2.7 billion in 2022. But now this record is about to be broken as automobile industry giant Hyundai Motor is about to conduct its IPO (Hyundai Motor India IPO). Market regulator SEBI has given it a green signal, clearing the way for Humbai’s upcoming IPO, which is expected to open next month, in October 2024.
Hyundai Motor will not issue new shares
If we look at the previous Reuters report on Hyundai Motor India IPO, Hyundai Motor will not be issuing new shares as per the Draft Red Hearing Prospectus (DRHP) filed with SEBI. The local Korean company will sell part of its wholly-owned subsidiary’s equity to retail investors and other investors through an “offer for sale”, that is, Hyundai Motor’s IPO will be entirely an OFS issuance. Accordingly, the promoters will sell shares of Rs 14.2 crore at a face value of Rs 10.
Automaker IPOs two decades later
Hyundai Motor India was the second-largest company in India in terms of passenger car sales in fiscal 2024, after Maruti Suzuki. Maruti Suzuki has a market capitalization of approximately $48 billion. Maruti Suzuki’s initial public offering was in 2003. Under such circumstances, after 20 years, India ushered in the IPO of an automobile manufacturer, whose scale exceeded the country’s largest IPO to date. Hyundai Motor India is targeting a valuation of $1.8 to $20 billion through the IPO.
Company can sell 17.5% stake
After the United States and South Korea, Hyundai Motor has the highest revenue in India. The company can increase capital through an initial public offering. In addition, it can quickly expand market capacity. The South Korean company can sell its 17.5 per cent stake in Hyundai Motor India Ltd, according to DHRP. Hyundai has partnered with investment banks such as Kotak Mahindra, Citibank, Morgan Stanley, JP Morgan and HSBC to facilitate its access to public markets and its success. After SEBI’s approval, now the company can soon share the price range and other details of the Hyundai IPO.
(Note – Always take advice from market experts before making any kind of investment in the stock market or IPO market.)
