Hyundai Motor’s Indian Subsidiary Seeks $3 Billion IPO in Major Market Push

In a significant move aimed at capitalizing on the world’s third-largest automobile market, Hyundai Motor’s Indian subsidiary is pushing for an initial public offering (IPO) on the Indian stock market. The South Korean automotive giant announced on June 16 that it had submitted a preliminary document, known as the “Draft Red Herring Prospectus (DRHP),” to the Indian securities market, marking a crucial step in its IPO journey.

Major foreign media outlets, including Reuters, have reported on Hyundai’s ambitious plans. “Hyundai plans to raise up to $3 billion by selling up to 142 million shares (17.5%) out of the 812 million shares (100%) it holds in its Indian subsidiary,” Reuters noted, emphasizing the scale of the public offering.

The IPO will be conducted through a “public sale” method, meaning no new shares will be issued; instead, a portion of the existing shares held by Hyundai Motor will be sold in the market. This approach estimates the corporate value of Hyundai Motor’s Indian subsidiary to be around $30 billion.

If successful, this IPO will surpass the record set by the Indian state-owned insurance company, Life Insurance Corporation of India (LIC), which raised $2.5 billion in 2022. The listing process, which typically takes up to 90 days from the submission of the initial prospectus, is expected to be completed by October this year at the latest.

Chung Eui-sun, Chairman of Hyundai Motor Group, has been closely involved in the company’s Indian operations. In August last year, he inspected the production quality of strategic models at Hyundai Motor’s Indian plant, underscoring the importance of the Indian market to Hyundai’s global strategy. “Aiming for the World’s 3rd Largest Market,” Hyundai Motor stated, highlighting its focus on India.

India, known for its rapid growth and increasing demand for vehicles driven by a growing middle class and urbanization, presents a lucrative opportunity for Hyundai. The Indian automobile market, following China and the United States, is a key battleground for global automotive manufacturers.

Hyundai Motor India Limited (HMIL), a wholly-owned subsidiary of Hyundai Motor Company, has been operating in India since 1996 and has established itself as one of the leading automobile manufacturers in the country. The company’s history and operations in India, including its manufacturing plants and significant market share, provide context for the significance of this IPO.

The economic and regulatory environment in India, overseen by the Securities and Exchange Board of India (SEBI), plays a crucial role in the IPO process. Understanding the investment climate and regulatory framework is essential for grasping the broader implications of Hyundai’s public offering.

With the submission of the DRHP, Hyundai Motor is poised to make a significant impact on the Indian stock market. The company is reportedly planning to officially announce its Indian subsidiary’s listing plans soon, setting the stage for what could be one of the largest IPOs in Indian history.