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Hyundai Motor India is gearing up for its highly anticipated initial public offering (IPO), aiming to raise a substantial Rs 25,000 crore. According to Reuters sources, the IPO is slated to open for subscriptions next week, with a price band set at Rs 1,865-1,960 per share. This valuation, at the upper end of the price range, would place the South Korean automaker's Indian unit at a remarkable nearly $19 billion, making it the largest public issue in India to date.
The IPO will unfold in two phases: institutional investors will have the opportunity to subscribe from October 14th, followed by retail and other investors from October 15th to 17th. The listing of Hyundai Motor India's stock on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) is expected to occur on October 22nd.
The IPO's structure involves an offer for sale (OFS) route, with Hyundai Motor's South Korean parent offloading up to 17.5 percent of its stake in the wholly owned Indian subsidiary. This move signifies a significant milestone for Hyundai Motor India, marking the largest auto sector listing in the country since Maruti Suzuki's IPO in 2003. Given the recent record highs in Indian stock markets and the surge in IPOs across diverse industries, Hyundai Motor India's offering is anticipated to attract substantial interest from both institutional and retail investors.
Hyundai Motor India's strong position in the Indian auto market further bolsters its appeal. In FY24, the company secured the second spot as India's largest carmaker, trailing only Maruti Suzuki in terms of passenger sales volumes. The company had submitted its draft red herring prospectus (DRHP) in June and subsequently received approvals from the Securities and Exchange Board of India (SEBI). The IPO is envisioned to enhance Hyundai Motor India's visibility and brand image in the domestic market, while concurrently providing liquidity for its shares.
The IPO is expected to surpass previous records, including the Rs 21,000-crore ($2.7 billion) public offering by Life Insurance Corporation (LIC) in 2022. Following the IPO, Hyundai Motor will retain an 82.5 percent equity stake in Hyundai Motor India. The parent company Hyundai Motor's share price on the Korean stock exchange has witnessed impressive returns, gaining over 34 percent in the past year, significantly outperforming the benchmark KOSPI index, which has recorded an approximately 10 percent increase.
Despite its anticipated success, investors are advised to conduct thorough due diligence and consult with certified experts before making any investment decisions. The information presented in this article is for informational purposes only and should not be construed as financial advice.