BTN News: Shares would be listed in Mumbai, and a successful flotation would be the biggest ever in the country if Hyundai Motor India goes ahead and formally makes an application for regulatory clearance. For the first time in two decades, an automotive OEM is going public in India, the last being Maruti Suzuki’s listing in 2003. The OFS will see the South-Korean parent company, Hyundai Motor Company (HMC), selling 17.5% of its interest, or 142,194,700 equity shares.
Sources said the IPO is planned for around Rs 25,000 crore or $3 billion, exceeding the Rs 22,000 crore float by Life Insurance Corporation of India in May 2022. The source further said that with Indian stock markets close to record highs, UBS wanted to make the move at a strategic time.
Moreover, Hyundai Motor India has played an integral role in shaping Hyundai’s global operations JSON Array[[]]; Hyundai has two manufacturing plants and has invested $5 billion in the country, with another $4 billion planned in the next 10 years from 2017, as India is a key growth market. In India, the market is the third largest revenue generator for the company, behind China and the US.
The South Korean automaker’s first global public offering is part of its plan to remedy the ‘Korea discount’, a reference to South Korean firms being valued at lower multiples than global competitors. Allegedly, corporate governance issues, capital allocation practices, and lack of transparency among the family-run conglomerates, termed as Chaebols, contribute to this discrepancy. Lists the Indian arm of Hyundai to get better valuations; bring in more investors.
First, the market analysts are saying that the IPO should hit the market in Diwali 2024 depending on the SEBI approval (approximate time of SEBI it takes 3 to six months…). The Holiday season can foster an investor climate and that can be conducive to Hyundai syllabi.
Leading banks such as JP Morgan, Citi, HSBC, Deutsche Bank, and Kotak Mahindra Capital are the other advisors for the IPO. It plans to list the shares on BSE and NSE
Hyundai Motor India will invest ₹32,000 crore in Total Facility Towards New ProjectsRECT & Construction according to the Draft Red Herring Prospectus (DRHP). The company is a major products and export hub for developing markets and some of the major passenger vehicle models which it has in its portfolio are the Verna as well as the Venue. Until March 31, 2024, the Chennai plant was set to reach an annual production capacity of 824,000 units.
In increasing its footprint in the Indian market, Hyundai Motor Company not only wants to reduce the ‘Korea discount’ and also wants to strengthen its whole positioning of integrating in some of the world’s leading automotive markets.
