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Hyundai Motor India prepares Indian stock market's biggest IPO, targeting $3,3 billion

With a per-share price set between Rs 1.865 and Rs 1.960 (around $22-24), Hyundai aims to strengthen its presence in India and meet the growing demand for vehicles by becoming a manufacturing hub for emerging markets. Here are the details

Hyundai Motor India prepares Indian stock market's biggest IPO, targeting $3,3 billion

Hyundai Motor India is preparing to launch the most next week big IPO never realized in the country, with a goal of raised $3,3 billionThis will surpass previous offers by LIC, India’s former state-owned insurance company, in May 2022 for $2,5 billion, and One97 Communications, the parent company of online payments platform Paytm, launched in 2021 (nearly $2 billion).

Hyundai plans to use the proceeds to strengthen its presence in India and meet growing demand for its vehicles.

Hyundai Motor India IPO: Offering Details

The company has set a share price between Rs 1.865 and Rs 1.960 (approximately $22-24). With an aggregate valuation of about Rs 1,6 lakh crore, equivalent to about $19 billion, Hyundai aims to raise between Rs 26.505 crore and Rs 27.856 crore (approximately $3,18-3,34 billion) through an offer for sale of up to 14,2 crore ordinary shares, or 142 million (since 1 crore = 10 million), each with a face value of Rs 10.

This offering represents the first IPO on the Indian stock exchange in over 20 years, after that of Maruti Suzuki in 2003, and comes as the second largest in the world in 2024. It comes at a time when Indian stock markets are hitting record highs, but auto sales in the country are showing signs of slowing. While sales of new SUVs are steady, sales of hatchbacks and small cars – which account for about 30% of annual sales – are falling as inflationary pressures hit middle-income consumers.

Who can participate?

Approximately 50% of the shares are reserved for institutional investors, 35% is for the retail investors and 15% for non-institutional ones. Additionally, there are up to 778.400 shares available for the employees Hyundai, at a discount of 186 rupees per share ($2,2). Subscriptions for large investors will begin on October 14, while retail and other investors can participate from October 15 to 17. The shares will start trading in Mumbai on October 22.

The deal is being managed by Kotak Mahindra Capital, Citigroup Global, HSBC Securities, JP Morgan and Morgan Stanley, while KFin Technologies is the registrar of the offering.

Market position

Hyundai currently ranks as the second-largest carmaker in India, holding about 15 percent of the passenger vehicle market, while Maruti Suzuki leads the sector with over 40 percent. Since its entry into the Indian market 28 years ago, Hyundai has made a name for itself with iconic models like the Santro and Creta SUV, which have been a hit with consumers. The company has already invested $5 billion in the country and plans to inject another $4 billion over the next decade.

To further strengthen its presence, the company plans to launch new electric vehicles, establish charging stations and introduce hybrid cars starting from 2027. To support these initiatives, Hyundai already has a production plant in India dedicated to both local sales and exports, and plans to open a second plant by 2025.

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Unsoo Kim, CEO of Hyundai Motor India, said: “India is one of the most promising automotive markets in the world. We intend to invest aggressively in new products, future technologies and R&D capabilities of the Indian unit. The IPO will enable us to further dedicate ourselves to success in the country.” Also Tarun Garg, chief operating officer of Hyundai India, shared an optimistic outlook, saying, “We intend to become a global manufacturing hub for Hyundai for emerging markets. In the next 3-4 years, we expect to increase production by 30%, which will improve our domestic and export volumes.”

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