Hyundai Motor's India unit files for blockbuster $3 billion IPO

Industry

Published: 16 Jun. 2024, 15:11

Hyundai Motor's India unit files for blockbuster $3 billion IPO

Hyundai Motor Group Executive Chair Euisun Chung inspects the company's research center in India in August. [HYUNDAI MOTOR]

Hyundai Motor’s Indian subsidiary filed for an initial public offering (IPO) of almost $3 billion, likely to be the biggest such offering in the nation's history, according to a Reuters report.

The Korean automaker is not issuing new shares in the IPO but is expected to sell up to 142 million of its 812 million total shares, or about 17.5 percent, the report said.

[NEWS IN FOCUS] Why Hyundai is mulling a $3 billion IPO in India

Hyundai reportedly aims to raise $2 to $3 billion through the IPO at a valuation of up to $30 billion, though the draft prospectus filed included no pricing details.

The Securities and Exchange Board of India, India's largest markets regulator, is expected to approve or reject the IPO in three to six months.

Hyundai Motor didn't officially confirm the IPO but added that it is "reviewing all scenarios to increase corporate value."

Hyundai purchased General Motors’ manufacturing plant in Talegaon, India, last year. [YONHAP]

The IPO will make Hyundai the first carmaker in India to go public in two decades since Maruti Suzuki in 2003.

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

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

Established in 1996, Hyundai Motor is India's second-largest automaker after Maruti Suzuki. It sold over 600,000 cars in India last year, an all-time high in the 27 years since the Indian subsidiary was formed.

Hyundai invested $5 billion in operating two plants in Chennai, Tamil Nadu, in southern India. The plants can produce 850,000 cars a year.

Hyundai also purchased a factory in Talegaon from General Motors last year. The factory can produce 130,000 vehicles a year, likely boosting Hyundai’s annual production capacity in India to 1 million.

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.

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