Hyundai India has announced the launch of its $3.3 billion Initial Public Offering (IPO) in Mumbai, marking a significant milestone in the country’s capital market history. This IPO will be the largest ever in India, surpassing all previous offerings, and is set to be the second-largest globally in 2024, following the $5.1 billion IPO of U.S.-based Lineage Inc. earlier this year. The announcement comes at a time when India’s financial markets are thriving, with a large number of companies going public in 2024. The move by Hyundai signals confidence in India’s capital markets and positions the automaker for expansion in one of the world’s fastest-growing car markets.
Overview of the Hyundai India IPO
Hyundai India, a wholly-owned subsidiary of South Korea’s Hyundai Motor Company, will open its IPO for institutional investors on Monday, while retail and other investors will be able to place orders starting Tuesday and Wednesday. Trading of Hyundai India’s shares is set to begin on October 22 in Mumbai, according to regulatory filings. The IPO aims to raise approximately $3.3 billion (around ₹27,500 crore), with the price band for the shares set between ₹1,865 and ₹1,960.
The parent company, Hyundai Motor, plans to sell up to 17.5% of its stake in Hyundai India through the IPO. Notably, this will not involve the issuance of new shares; instead, Hyundai Motor will divest a portion of its holdings in the Indian unit, valuing Hyundai India at approximately $19 billion. At this valuation, the Indian subsidiary will represent about 40% of Hyundai Motor’s overall market capitalization.
The decision to list Hyundai India is significant because it will be the first time the automaker has been listed outside of South Korea. The move is expected to create a strong local presence for Hyundai in India, giving investors an opportunity to be part of one of the country’s most prominent automotive companies.
The Indian IPO Boom in 2024
India’s IPO market has been on a remarkable upswing in 2024. According to LSEG data, 260 companies have collectively raised more than $9 billion this year through IPOs, surpassing the total of $7.42 billion raised in 2023. This wave of public offerings highlights the increasing attractiveness of India’s capital markets, with both domestic and international investors showing keen interest in various sectors, particularly technology, consumer goods, and automotive.
Hyundai’s IPO is the largest in the country’s history, eclipsing the previous record set by Life Insurance Corporation of India (LIC) in 2022 when it raised $2.5 billion. The timing of Hyundai India’s IPO aligns with the broader market trend, as investors continue to flock to high-profile public offerings, especially in the automotive sector, which has been one of the best-performing segments in the Indian stock market this year.
Hyundai’s Strategic Plans for India
The IPO comes as Hyundai India is strengthening its foothold in the country, the world’s fourth-largest automobile market. Hyundai is India’s second-largest automaker, trailing only behind Maruti Suzuki, and has ambitious plans to expand its market share by enhancing its product offerings and investing in new technologies. Analysts believe the funds raised from the IPO will enable Hyundai to increase its production capacity in India, particularly for electric vehicles (EVs) and hybrids, as the country’s auto industry shifts toward cleaner, more sustainable options.
Shin Yoon-chul, an analyst at Kiwoom Securities, said, “With the funds raised by the IPO, Hyundai Motor would secure a sizable investment capacity to close the market share gap with India’s No.1 player Maruti Suzuki, as the South Korea automaker would likely invest to expand its production in India.” He further noted that the timing of the IPO is ideal, as the auto sector is currently leading the Indian stock market in terms of performance.
Hyundai’s strategy in India includes expanding its portfolio of sports utility vehicles (SUVs), which have become increasingly popular among Indian consumers. The company is also making strides in the electric vehicle space, with plans to introduce its first India-made electric vehicle in early 2025. By 2026, Hyundai aims to launch at least two gasoline-powered models designed specifically for the Indian market, catering to the diverse preferences of the country’s consumers.
India’s Auto Market and Hyundai’s Role
India’s automobile industry is poised for growth, with increasing demand for passenger vehicles and a strong focus on sustainability. The government’s push toward electric mobility, combined with rising consumer interest in environmentally friendly vehicles, has made India a key market for global automakers. Hyundai Motor’s decision to prioritize electric and hybrid vehicle production in India reflects the broader industry shift towards green technology and aligns with India’s goal of reducing carbon emissions.
Hyundai has already established itself as a leading player in the Indian market, and its IPO will further solidify its position. The automaker has enjoyed success with its lineup of hatchbacks, sedans, and SUVs, and now seeks to capture more market share from domestic rivals such as Maruti Suzuki by expanding its product offerings. The introduction of electric vehicles will play a crucial role in Hyundai’s strategy to differentiate itself from competitors and tap into the growing demand for eco-friendly transportation.
In addition to its domestic competition, Hyundai India faces challenges from other international automakers, including Tata Motors, Mahindra, and foreign brands like Toyota and Honda, all of which are also vying for a piece of the lucrative Indian market. Hyundai’s ability to innovate and adapt to market trends will be key to its continued success.
Conclusion
The Hyundai India IPO is set to be a historic event in the country’s financial markets, not only because of its size but also due to its potential impact on the automotive industry. As India’s second-largest automaker, Hyundai is well-positioned to take advantage of the country’s growing demand for vehicles, particularly in the electric and hybrid segments. The IPO will provide Hyundai with the necessary capital to expand its production capabilities and strengthen its market presence.
With India’s capital markets on a high-growth trajectory, Hyundai’s move to go public comes at an opportune time. The funds raised from the IPO will enable the company to invest in new technologies and products, helping it compete with established players like Maruti Suzuki. As Hyundai Motor looks to the future, its commitment to innovation and sustainability will likely drive its success in India, a market that is rapidly evolving and becoming more environmentally conscious.