Hyundai files for $3 bn IPO in India

Hyundai Motor Group Chairman Chung Eui-sun (third left) visited Hyundai Motor India in April. [Photo provided by Hyundai Motor Group]

South Korean top automaker Hyundai Motor Co.‘s India unit is set to launch the largest initial public offering (IPO) in India’s history. Hyundai plans to use the funds raised from the IPO to expand its production capacity in the country, which has become the world‘s third-largest automobile market following China and the United States and strengthen its position in emerging markets.

According to Reuters and other foreign media on Saturday (local time), Hyundai Motor India Ltd. said in its application to the Securities and Exchange Board of India (SEBI) that it intends to sell up to 142 million shares, or 17.5 percent of the 812 million shares held by its parent company, Hyundai Motor.

Hyundai Motor India will not issue new shares in the IPO, which will involve its Korean parent selling part of its stake in the wholly owned unit to retail and other investors via a so-called “offer for sale” route. Reuters estimated that this IPO could raise up to $3 billion, marking the IPO the largest in India’s history.

The largest IPO in the Indian stock market to date was the listing of Life Insurance Corporation of India (LIC) in 2022 which raised $2.5 billion.

[Photo by Yonhap]

Hyundai Motor India is the second-largest automaker in India by sales, after Maruti Suzuki. Hyundai Motor established its Indian operations in 1996 and officially entered the Indian market in 1998 with the production of its first model, Santro, at its Chennai plant in Tamil Nadu. It currently operates two plants in Chennai.

Hyundai‘s move to enter the Indian stock market is seen as part of a strategy to strengthen its localization efforts and elevate its status as a global company. It is aiming for long-term growth in India by setting strategic goals such as increasing the production capacity of its Indian plants to 1.5 million units annually (including 500,000 units from Kia), which is four times the production capacity of its Chinese plants.

It also plans to enhance its production capacity, expand its electric vehicle offerings, and develop an electrification ecosystem in India, the world’s most populous country that became the fifth-largest economy in 2023. The Indian automobile market size was approximately 5 million units in 2023, and it is the third-largest market after China and the United States.