Hyundai's IPO could be India's largest ever, surpassing LIC's $2.7 billion listing

Hyundai Motor India Limited (HMIL), the Indian subsidiary of South Korean auto giant Hyundai Motor Co., has filed draft papers with SEBI (Securities and Exchange Board of India) to raise approximately $3 billion through an initial public offering (IPO).

Moneycontrol reported that the planned IPO, targeting a valuation between $18 billion and $20 billion, could become India's largest ever, surpassing the $2.7 billion listing of state-owned Life Insurance Corporation (LIC) in 2022.

The IPO is structured as a pure Offer For Sale (OFS) by the promoter, which involves the sale of 142,194,700 equity shares with a face value of Rs 10 each. According to the draft red herring prospectus (DRHP) filed on June 14, the primary objectives are to execute the OFS and to gain the benefits of listing the equity shares on the stock exchanges.

“The objects of the offer are to carry out the Offer for Sale of up to 142,194,700 Equity Shares of the face value of Rs 10 each by the Promoter Selling Shareholder and to achieve the benefits of listing the Equity Shares on the Stock Exchanges," the DRHP stated.

"Further, our Company expects that listing of the Equity Shares will enhance our visibility and brand image and provide liquidity and a public market for the Equity Shares in India,” Moneycontrol reported.

Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital, and Morgan Stanley are the investment banks advising on the transaction. Law firm Shardul Amarchand Mangaldas is acting as the company counsel, with Latham and Watkins serving as the international counsel.

Hyundai Motor India, which ranked as India’s second-largest carmaker by passenger sales volume after Maruti Suzuki in FY24, ended FY23 with revenues of Rs 60,000 crore and profits of Rs 4,653 crore. These figures are the highest among non-listed car manufacturers in the country. The Indian market accounted for approximately 13 per cent of Hyundai’s global sales in 2023, underscoring its significance in the automaker’s global strategy.

The Indian arm has a diverse product lineup including popular models such as the i20, Verna, Creta, Aura, and Tucson. The company achieved its highest-ever domestic sales in 2023, surpassing the six-lakh mark.

The share price of Maruti Suzuki India, Hyundai’s primary competitor, has surged by 24.35 per cent over the past six months, resulting in a market cap of around Rs 4,00,000 crore (nearly $48 billion). This underscores the robust investor interest in the Indian automotive sector, setting a promising context for Hyundai’s IPO.

Hyundai Motor Group's Executive Chair Euisun Chung visited India last month to review the company’s mid to long-term mobility strategies, reflecting the parent company's commitment to strengthening its foothold in the Indian market.