Hyundai Motor India gets green light for $3 billion IPO

The Securities and Exchange Board of India has approved Hyundai Motor India's proposed initial public offering of up to $3 billion.

Hyundai Motor Group Executive Chair Euisun Chung, center, takes selfies with employees of Hyundai Motor's Indian subsidiary after a town hall meeting on April 23. [HYUNDAI MOTOR]

Hyundai Motor India gained approval for its proposed initial public offering (IPO) of almost $3 billion from India's largest market regulator, according to a Reuters report.

The Securities and Exchange Board of India (SEBI) recently gave the green light for the IPO, which seeks to sell up to 142 million of the company's 812 million total shares, or about 17.5 percent, the report said, citing two undisclosed sources.

The approval comes three months after the Indian subsidiary of Hyundai Motor filed a preliminary offering document to the SEBI on June 14.

Hyundai aims to raise around $3 billion through the IPO at a valuation of up to $30 billion, making it the biggest IPO in the nation's history.

It will also make Hyundai the first carmaker in India to go public in two decades since Maruti Suzuki in 2003. Established in 1996, Hyundai Motor is India's second-largest automaker after Maruti Suzuki with over 600,000 cars sold in the country last year, an all-time high in its 27-year history.

Hyundai expects to finalize the IPO by the end of October.

"India's stock market is the fourth-largest globally, and Hyundai's India unit appears solid from a profit perspective," said Lee Seung-jo, senior vice president of the finance division at Hyundai Motor, during a second-quarter earnings conference call in July.

"We also acquired a third plant there, and the IPO will be the start of our next big leap forward in the Indian market."

Hyundai purchased a factory in Talegaon from General Motors last year, which will likely boost Hyundai’s annual production capacity in India to 1 million units. The automaker already runs two plants in Chennai, Tamil Nadu, in southern India.

The expected $3 billion IPO comes as Hyundai eyes the South Asian country as a replacement manufacturing hub for China and Russia, where sales have plummeted due to tensions over the U.S. deployment of the Terminal High Altitude Area Defense system, or Thaad, in Korea as well as Russia's ongoing war in Ukraine.

India is the world's third-largest auto market after China and the United States, with some 4.1 million vehicles sold last year.

The automaker previously said it would invest an additional $4 billion in India over 10 years to launch new EVs, charging stations and a battery pack assembly unit.

The carmaker reportedly plans to launch its first Indian-made EV early next year as part of its goal of releasing five EVs in the country through 2030.

BY SARAH CHEA [chea.sarah@joongang.co.kr]