Hyundai Motor India gets Sebi nod for Rs20,000-cr IPO

Hyundai Motor India, the Indian unit of South Korean carmaker Hyundai Motors, has received approval from market regulator Securities and Exchange Board of India (Sebi) forits Rs20,000 crore ($3 billion) initial public offer (IPO).

The IPO, slated for launch in October, is the largest so far in India, and surpasses the Rs18,000 crore ($2.7 billion) IPO by LIC in 2022. 

The IPO is entirely an offer-for-sale (OFS) whereby promoters of the parent company, Hyundai Motor Company, will be offloading 142,194,700 equity shares, and there will be no fresh issue of shares by Hyundai Motors India, as per the draft red herring prospectus (DRHP) filed by the company in June.

With the IPO, Hyundai, the second-largest carmaker in India, will also become the second foreign car manufacturer, after Maruti Suzuki, to list in the Indian stock market.

Since the public issue is completely an OFS, Hyundai Motor India Ltd will not receive any proceeds from the IPO.

The offering, based on a valuation of Rs1.5 lakh crore ($18 billion) for the Indian unit, will be a dilution of around 15 per cent of the company’s total market capitalisation.

The issue is also aimed at boosting visibility and market presence of the company through listing of shares, according to the draft prospectus.

Hyundai Motor India commenced operations in India in 1996 and currently sells 13 models, including 8 SUVs. India is the third-biggest market for Hyundai after the US and South Korea.

The South Korean carmaker has already invested $5 billion in India and has committed to invest $4 billion more over the next decade.