Marking a New Chapter in Hyundai’s Journey in India, IPO Aims to Strengthen Market Position
Hyundai’s Journey in India
Hyundai’s presence in India has been nothing short of transformative. Since its entry into the Indian market in 1996, Hyundai has steadily grown to become the country’s second-largest automaker, shaping the Indian automobile landscape with popular models like the Santro, Creta, and Venue. Competing closely with market leader Maruti Suzuki, Hyundai has been a key player in the shift toward modern, feature-packed cars, while maintaining a strong focus on quality and innovation. Over the years, Hyundai India has expanded its portfolio, increased production and introduced new models tailored to Indian consumers. Now, Hyundai is set to embark on a new journey—taking its Indian operations public with the country’s largest-ever Initial Public Offering (IPO).
Hyundai India’s $3.3 Billion IPO: A Landmark in Indian Capital Markets
Hyundai India has launched its highly anticipated $3.3 billion IPO, marking the largest-ever share sale in the country’s history. According to regulatory filings, the IPO officially opened for institutional investors on Monday in Mumbai, with retail investors invited to participate on Tuesday and Wednesday. This historic IPO is not just significant for India, but also stands as the world’s second-largest IPO in 2024, following Lineage Inc.’s $5.1 billion U.S. IPO earlier this year.
The offering highlights the resilience and vibrancy of India’s capital markets, which have seen more than 260 companies raise over $9 billion so far in 2024. With the total volume already surpassing last year’s $7.42 billion, Hyundai’s IPO is set to push these numbers to new heights.
Key Details of the IPO
In this landmark IPO, Hyundai’s South Korean parent company, Hyundai Motor, will sell up to 17.5% of its stake in Hyundai India, which is valued at approximately $19 billion. No new shares will be issued as part of the offering, with 142,194,700 shares being made available at a price range of ₹1,865 to ₹1,960 per share.
Once completed, the market capitalization of Hyundai India will account for nearly 40% of Hyundai Motor’s global valuation. This will also be the first time Hyundai is listed outside its home market in South Korea, reflecting the growing significance of India as a key market for the automaker.
The IPO comes at a time when India’s automotive sector is performing exceptionally well in the stock market, bolstered by increasing demand for both traditional gasoline-powered vehicles and electric vehicles (EVs).
Strategic Implications for Hyundai
As part of its long-term strategy, Hyundai plans to expand its operations in India, especially in the areas of hybrid and electric vehicle production. Analysts believe that the funds raised through this IPO will provide Hyundai with the investment capacity needed to close the market share gap with India’s leading automaker, Maruti Suzuki.
Shin Yoon-chul, an analyst at Kiwoom Securities, commented, “With the funds raised by the IPO, Hyundai Motor would secure a sizable investment capacity to close the market share gap with India’s No.1 player Maruti Suzuki. The timing of the IPO is favourable, given the strong performance of the auto sector in India’s stock market.”
In the coming years, Hyundai India is expected to launch its first locally manufactured electric vehicle, which is scheduled to debut in early 2025. In addition to this, Hyundai plans to introduce at least two new gasoline-powered models tailored specifically to the Indian market by 2026. The company’s efforts to expand its SUV line-up also reflect its ambition to capture a larger share of India’s booming SUV market.
A Record-Breaking Deal
If successful, Hyundai India’s IPO will surpass the previous record set by the Life Insurance Corporation of India (LIC) in 2022, when the state-owned insurance giant raised $2.5 billion. This IPO will also serve as a significant boost for Hyundai’s efforts to position itself as a dominant player in the Indian automotive market, not just through innovation but also through strategic financial maneuvers.
A New Era for Hyundai India
Hyundai India’s record-breaking $3.3 billion IPO is a pivotal moment, not only for the company but also for India’s financial and automotive sectors. As Hyundai strengthens its foothold in India with expanded production and a focus on green technologies, the IPO signals the company’s intent to lead in one of the world’s most dynamic automobile markets. The success of this IPO will not only redefine Hyundai’s future in India but also underscore the growing importance of the Indian market in the global automotive industry.
(With inputs from agencies)
