Hyundai Motor IPO: 10 things investors should know about this public offer

The Indian arm of South Korean automaker Hyundai Motor has filed preliminary papers with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). The company aims to raise around $2.5-3 billion through this public offering. Here are 10 things to know about the IPO:

1. About the Company
Hyundai entered India 28 years ago and has won the hearts of buyers with its affordable cars ranging from Santro to sports-utility vehicle (SUV) Creta. The company plans to launch new electric vehicles, set up charging stations and set up battery pack assembly units.

2. About IPO
Hyundai Motor’s Indian unit on Saturday sought regulatory approval to list on the Mumbai stock exchange in what could be the country’s biggest IPO and will see the South Korean parent company sell up to 17.5% stake in the company. The IPO will make Hyundai the first carmaker to go public in India in two decades after Maruti Suzuki in 2003.

3. IPO price

Hyundai’s draft prospectus does not provide detailed information about the IPO price or the company’s valuation. However, according to media reports, Hyundai aims to raise around $2.5-3 billion at a valuation of up to $30 billion. This could make it one of the largest IPOs in India after Life Insurance Corporation of India’s $2.5 billion issue in 2022.

4. Points size
According to the filing with SEBI, Hyundai Motor will offer for sale 14.2 crore equity shares out of a total of 81.22 crore shares in the IPO.

5. The IPO route
Hyundai will not issue new shares in the IPO. Instead, the South Korean parent company will sell a part of its stake in the wholly-owned entity to retail and other investors through the offer for sale (OFS) route.

6. Objectives of the proposal

Hyundai hopes that listing equity shares in India will enhance its visibility and brand image and provide liquidity and public market access for the shares. The IPO is aimed at unlocking value for the Indian business and helping the Korean automaker reduce its valuation discount compared to global and Asian competitors.

7. Proposal structure
Not more than 50% of the shares issued will be reserved for qualified institutional buyers (QIBs), not less than 35% of the shares will be reserved for retail individual investors (RIIs), and not less than 15% of the shares will be reserved for non-institutional investors (NIIs).

8. Lead Manager
The book-running lead managers to the offer are Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities & Capital Markets (India), JPMorgan India and Morgan Stanley India.

9. The Registrar
KFin Technologies is the registrar to the issue.

10. Financial performance
Hyundai Motor India Ltd is India’s second-largest carmaker after Maruti Suzuki in terms of passenger sales volume in FY24. The Indian unit ended FY23 with revenue of Rs 60,000 crore and profit of Rs 4,653 crore, the highest among unlisted carmakers in the country.

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