Potentially India's Largest Ever IPO
Hyundai Motor India is seeking regulatory approval to go public on the Bombay Stock Exchange (BSE) through an initial public offering (IPO) that could raise up to $3 billion, making it one of the largest share sales in Indian market history.
In a draft red herring prospectus (DRHP) filed with Securities and Exchange Board of India (SEBI) over the weekend, the country's second largest car manufacturer proposed to sell up to 17.5% stake through an ‘Offer For Sale' (OFS) route. This will see Hyundai Motor Company, the South Korean parent, offload around 142 million shares to investors.
While pricing and valuation details were not disclosed, sources familiar with the plans indicate Hyundai is targeting a company valuation of approximately $30 billion in the public listing. The estimated funds raised from the IPO are in the range of $2.5-3 billion.
As India's first automaker to list on the stock exchange in two decades, the move will provide Hyundai Motor India with greater financial flexibility to fund its growth plans as the domestic market continues its projected rise in vehicle demand. The listing is also aimed at boosting the local unit's profile and brand image within the fiercely competitive Indian auto sector dominated by industry leader Maruti Suzuki.
India represents an important growth market for Hyundai Motor, generating around 10% of its total global revenue currently. Going public will allow the company to tap into the bourses to raise capital for future investments, new model launches and facility expansions, without relying solely on parent company funding support.
A successful IPO would put Hyundai Motor India on an even stronger footing to compete with domestic rivals such as Tata Motors, while enhancing transparency and providing investors an opportunity to own shares in one of the nation's most prominent vehicle manufacturers.
