Hyundai plans Rs 25,000 crore IPO, India's biggest

NEW DELHI/ MUMBAI: Korean car major Hyundai Motor is looking to sell around 17% stake in its Indian arm through an initial share sale (IPO), which may be India’s biggest issue so far, to raise as much as Rs 25,000 crore (around $3 billion), valuing the company at around $18 billion, or around Rs 1.5 lakh crore.

With this, Hyundai will join other auto players such as Maruti Suzuki, Mahindra & Mahindra and Tata Motors in tapping the capital markets for raising funds. Others such as Ola have also lined up an IPO, with the proposal cleared by market regulator Sebi recently.

The Indian arm of the Korean company, which had been preparing for the IPO for the last one year or so, is likely to file the draft red herring prospectus (DRHP) with Sebi very soon, detailing the fund-raise plans, growth opportunities, and other key financial metrics.

Hyundai India’s IPO will be an offer for sale by the existing shareholder, with no fresh issue of shares planned. Citi India, JP Morgan India, Kotak Mahindra Capital are among the merchant bankers which will be managing the offer, sources said.

The timing is, however, yet to be finalised. “Sebi’s process may stretch for a few months. The stock markets are at record highs and look buoyant. Hyundai will want to see an early clearance to take benefit from the current positive sentiments,” a source said.

“The company is also in a rush as the car market appears to be veering towards a slowdown, after witnessing strong growth over the past two years. It wants to go to the market as early as possible,” the source added.

Hyundai has indicated an aggressive expansion plan ahead of the IPO, saying it will increase its annual production in the country to one million units by 2025, with a major focus on affordable electrics that it plans to locally produce.

The company has lined up Rs 32,000 crore for investments in India, which includes funds needed to add the Maharashtra factory — acquired from GM last year — to its India production footprint. The Maharashtra work will be completed by the middle of next year and bring in a fresh 2 lakh units to its current production capacity of 8.2 lakh units.

The company has an aggressive plan for EVs, and is expected to start with a green version of the Creta SUV next year and has plans to produce five EV models by 2030. Hyundai India will also utilise its sales network hubs, expanding the number of EV charging stations to 485 by 2030.

Hyundai has said that India holds “strategic importance” for the Korean group with increased focus on exports from the country.