In what could become India’s largest-ever IPO, Hyundai Motor Co’s Indian subsidiary, Hyundai Motor India Limited (HMIL), is preparing to file draft papers with the Securities and Exchange Board of India (SEBI) to raise around $3 billion. According to sources, the targeted valuation for this initial public offering (IPO) ranges between $18 billion and $20 billion.
Potential Record-Breaking Listing
If these plans succeed, it would eclipse the record set by the state-owned LIC’s $2.7 billion IPO in 2022. The IPO will involve Hyundai offering up to 142 million shares for sale out of a total of 812 million shares. This offering will not include new shares but will see the South Korean parent company selling part of its stake in the wholly-owned unit through an “offer for sale” mechanism.
Historical Significance
This IPO will be the first by an automaker in India in over 20 years, since Maruti Suzuki’s public listing in 2003. Hyundai is the second-largest carmaker in India, after Maruti Suzuki India. With India being Hyundai’s third-largest revenue market after the US and South Korea, the company seeks to leverage the burgeoning market potential in the country.
Hyundai has enlisted several investment banks, including Kotak Mahindra, Citibank, Morgan Stanley, JP Morgan, and HSBC to facilitate a successful IPO. These institutions will play crucial roles in the IPO process, ensuring a smooth transition into the public market.
Sales and Market Performance
Hyundai Motor India reported a 7% year-on-year increase in total sales, reaching 63,551 units in May, compared to 59,601 units during the same period last year. Despite a week-long maintenance shutdown at the Sriperumbudur factory, HMIL COO Tarun Garg highlighted the company’s strong sales performance. SUVs have been a major growth driver, accounting for over 67% of domestic sales last month.
Electric Vehicle Strategy
In April 2024, Hyundai Motor India announced plans to introduce five new electric vehicles (EVs) by 2030, moving up their timeline by two years. The company’s Chennai plant is set to produce its first electric SUV by the end of 2024. Additionally, Hyundai India and Kia have entered into an agreement with Exide Energy Solutions to manufacture batteries for EVs locally.
Current EV Offerings
Currently, Hyundai Motor India offers two electric vehicle models: the IONIQ5 and the KONA Electric, priced at approximately Rs 46 lakh and Rs 24 lakh (ex-showroom Delhi), respectively. The company has also announced plans to expand its EV lineup under both the Hyundai and Kia brands.
Long-Term Investment Plans
Hyundai Motor India is planning to invest Rs 20,000 crore over the next decade in Tamil Nadu. This investment aims to modernize vehicle platforms and expand its presence in the country’s rapidly evolving electric vehicle segment.
Final Thoughts
Hyundai Motor India’s strategic initiatives, from launching a record-breaking IPO to expanding its electric vehicle portfolio, highlight its dedication to growth and innovation in the Indian market. As the company continues to modernize and adapt to changing market trends, it strengthens its position in both the traditional and electric automotive sectors.
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