Hyundai’s $3.3 billion IPO in India expected on Oct. 22: Report

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Hyundai’s $3.3 billion IPO in India expected on Oct. 22: Report

Published: 06 Oct. 2024, 15:50 Updated: 06 Oct. 2024, 15:56

SARAH CHEA
chea.sarah@joongang.co.kr

Hyundai Motor Group Executive Chair Euisun Chung, right, inspects the group’s research development institute in India during his business trip to devise mid- and long-term mobility strategy in India last year. [HYUNDAI MOTOR GROUP]

Hyundai Motor India is expected to go public on Oct. 22, aiming to raise up to $3.3 billion through the country's largest anticipated share offering.

The Indian subsidiary of the Korean automaker is targeting a valuation of $19 billion for the initial public offering (IPO), according to a Bloomberg report citing anonymous sources.

The automaker plans to sell a 17.5 percent stake, or approximately 142 million of the company’s 812 million total shares, which may raise about $3.3 billion.

Many foreign and local institutional investors, including asset managers, insurers, pension funds and sovereign wealth funds, have expressed preliminary interest in buying shares in the IPO, the report said.

This report follows the recent news that the automaker received approval from the Securities and Exchange Board of India (SEBI) for the IPO.

The IPO will mark India's largest offering, breaking the record set by Mumbai-based Life Insurance Corporation of India, which raised $2.5 billion in 2022.

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

The raised funds will likely be used to expand local production capacity and invest in EVs. Hyundai Motor and Kia plan to boost their combined capacity to 1.5 million units by next year.

Hyundai purchased a factory in Talegaon from General Motors last year, which is expected to increase Hyundai’s annual production capacity in India to one million units. The automaker already operates two plants in Chennai, Tamil Nadu, in southern India.

Kia also runs a factory in Anantapur, India.

"It's important to become a company that could be loved by all in India, and concerning the growth of India's auto market, [the IPO] is important," Hyundai Motor CEO Chang Jae-hoon said at the Busan Mobility Show in June.

The IPO will "positively influence the value of Hyundai Motor," Chang added.

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

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