Hyundai Motor’s Indian subsidiary will submit a draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) within the next two weeks. This submission will mark the start of their initial public offering (IPO) journey. If successful, this IPO would be the first by an automaker in India in over 20 years, since Maruti Suzuki went public in 2003.
Investor Roadshows and SEBI Approval
Following the submission of the DRHP, Hyundai Motor India’s management will embark on investor roadshows in domestic and international markets starting next month. SEBI is expected to approve the DRHP within 60-90 days, indicating a potential market debut for Hyundai Motor India’s IPO by September or October. The company has enlisted prominent investment banks, including Citibank, Morgan Stanley, Kotak Mahindra, HSBC, and JPMorgan, to guide the IPO process.
Leveraging Market Performance
Hyundai Motor aims to capitalize on the strong performance of the Indian equities market, which has delivered an impressive annual return of 14% over the past decade, placing it among the top five globally best-performing markets. In February, reports indicated that Hyundai is targeting a valuation of $22-28 billion for its Indian division. The company plans to sell a 15-20% stake through the IPO, which will be an offer for sale by the Korean parent company.
Potential Impact on the Indian Automobile Sector
If Hyundai achieves its target valuation, it could lead to a revaluation of the Indian automobile sector, particularly benefiting Maruti Suzuki and deepening the domestic auto market. The successful IPO could set a new benchmark for other automakers and boost investor confidence in the Indian automotive industry.
Hyundai Motors’s EV Plans
Hyundai Motor currently offers two electric vehicles in its portfolio: the Hyundai Kona Electric and the Hyundai Ioniq 5. The company is planning to introduce several more electric cars shortly. Hyundai Motor India has announced its intention to unveil five new Battery electric vehicles (BEVs) by 2030, accelerating its original timeline by two years. These BEVs aim to address both the mass market and mass premium market, offering options including an SUV, sedan, and CUV (Compact Utility Vehicle).
The company’s Chennai plant is set to produce its inaugural electric sports utility vehicle by the end of 2024, ahead of the original schedule of introducing five EVs by 2032.
Additionally, Hyundai will soon launch the Exter EV and the recently teased Casper Electric, expanding its electric vehicle lineup. The Creta EV will be officially launched in India in January 2025.
IPO Investment in EV Development
With a robust lineup of electric vehicles, Hyundai may allocate funds raised from the upcoming IPO towards its EV development and production. This strategic investment could enhance Hyundai’s position in the growing electric vehicle market and support the company’s long-term sustainability goals.
