Hyundai Motor India IPO: Hyundai Motor India Ltd. (HMIL) is all set for a stellar initial public offering (IPO) in what could likely be the biggest public issue in the Indian primary market. The exact amount to be raised has not been specified in the draft red herring prospectus (DRHP) filed by HMIL to capital markets regulator markets regulator Securities and Exchange Board of India (SEBI).
The upcoming IPO could surpass the record set by the Life Insurance Corp (LIC) of India’s $2.46 billion issue in May 2022, making it the largest in the country’s history. The Indian arm of the South Korean automaker Hyundai Motor Co., is currently the second-largest carmaker in India after Maruti Suzuki India.
Also Read: Hyundai Motor India looks to raise $2.5 billion in potentially India’s largest IPO
Hyundai Motor India IPO Details
Bankers privy to the IPO suggest that the carmaker aims to raise approximately $2.5 – $3 billion through the upcoming issue, valuing the company at $25-30 billion. The proposed IPO is entirely an offer for sale (OFS) of 142,194,700 equity shares by Hyundai Motor Company, with no fresh issue component, according to the DRHP.
Hyundai Motor India will offer up to 142.2 million equity shares for the IPO, representing 17.5 per cent of the post-offer paid-up equity share capital. Since the public issue is completely an OFS, Hyundai Motor India will not receive any proceeds of the IPO. The auto major intends to offer 35 per cent of the total equity on OFS in the IPO to the retail individual investors.
In its draft papers, Hyundai Motor India said it expects that the listing of the equity shares “will enhance our visibility and brand image and provide liquidity and a public market for the shares”. Kotak Mahindra Capital Co Ltd, Citigroup Global Markets India Pvt. Ltd., HSBC Securities and Capital Markets (India) Pvt. Ltd., JP Morgan India Pvt. Ltd., and Morgan Stanley India Co. Pvt. Ltd. are the book-running lead managers (BRLMs) of the proposed public issue.
The DRHP has not provided any timeline for the listing, but typically SEBI takes three to six months to approve, reject or seek more information on IPOs. With the IPO, Hyundai aims to unlock value for its Indian arm and help the Korean automaker shed its valuation discount compared to global and Asian peers.
Hyundai Motor India: Comparison with listed peers
Hyundai Motor India Ltd, the second largest carmaker in India after Maruti Suzuki India. The upcoming IPO will make it the country’s first car maker to go public in two decades since Maruti Suzuki in 2003.
The listing is seen putting Hyundai Motor India on a stronger footing compared to Maruti Suzuki, Tata Motors and other rivals as it could make future fundraising easier, without the need for dependency on its Korean parent.
Hyundai Motor India said it plans to focus on “premiumisation”- selling more expensive cars, as well as increasing its EV market share and adding charging stations, where it lags behind Tata Motors. Hyundai India also said it wants to ship more cars, “strengthening” its position as an export hub.
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Published: 15 Jun 2024, 07:59 PM IST
