India’s second largest car maker Hyundai Motor India Ltd has filed a draft red herring prospectus (DRHP) for its much-awaited initial public offering (IPO). The South Korean parent company Hyundai Motor Company plans to dilute up to 17.5% stake in its wholly-owned India unit through the IPO, which only has an ‘offer-for-sale’ component.
The company will not issue any fresh shares in this offering.
Hyundai Motor Co will sell up to 14,21,94,700 of its 812,541,100 equity shares of Rs 10 face value, according to the DRHP filed with SEBI. This will be the first IPO by an Indian carmaker in more than two decades since Maruti Suzuki India was listed in 2003.
Up to half of the shares will be offered to Qualified Institutional Buyers, while 15% will be set aside for non-institutional buyers, and up to 35% for retail buyers. The shares will be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
India, the third largest passenger vehicle market in the world, is the third largest market for the South Korean company and accounts for around 14% of its global sales.
Hyundai India sold 6,14,721 vehicles in the domestic market during FY24, representing a growth of 8% on a year-on-year basis. It has around 15% market share in the Indian passenger vehicle market. Hyundai’s exports from India also rose 6.7% to 1,63,155 vehicles during the year.
Recently, Hyundai Motor India has committed a Rs 33,000 crore investment in the coming decade in the country and has set itself a target of creating a capacity of 1.5 million vehicles by the end of the decade.
Hyundai has introduced two electric cars — Kona and Ioniq 5 — in India. It is yet to launch a mass electric car. The company is expected to launch a mass-market electric car in early 2025.
While the company’s priority is electric vehicles, it is also planning to enter the hybrid segment in a couple of years amid growing consumer acceptance of the technology.
Kia has already committed to bringing in hybrid vehicles in India but Hyundai was earlier non-committal about bringing in that technology with investment being prioritised for pure battery electric vehicles.
Kotak Mahindra, Citi Group, HSBC Securities, JP Morgan and Morgan Stanley are the lead book-running managers for the IPO. Market regulator SEBI is likely to approve the DRHP for listing in two or three months, and Hyundai India could be looking to list its shares by September-October of this year.
Recently, India’s top electric two-wheeler maker, Ola Electric Mobility Ltd, filed papers for an IPO. The company plans to raise Rs 5,500 crore by issuing new shares, while its existing investors, including founder Bhavish Aggarwal, will sell 9,51,91,195 shares. ENDS