- Move marks the first initial public offering by an automobile manufacturer in India in over twenty years, following Maruti Suzuki’s listing in 2003.
New DELHI: The anticipated initial public offering (IPO) of Hyundai Motor India, scheduled for public subscription on October 14, represents a pivotal moment in the Indian capital market and the automotive industry.
With a target to raise approximately Rs25,000 crore (around $3 billion), this IPO is set to be the largest since the Life Insurance Corporation of India (LIC) launched its initial share sale in 2022, which amounted to Rs21,000 crore.
Hyundai’s IPO, outlined in the Draft Red Herring Prospectus (DRHP) filed in June, involves an Offer-for-Sale (OFS) of 142,194,700 equity shares by its promoter, Hyundai Motor Company.
Notably, this IPO does not include a fresh issue of shares, meaning the proceeds from this offering will not directly benefit Hyundai Motor India, which is notable for being the second-largest car manufacturer in the country, following Maruti Suzuki.
The decision to dilute a portion of the stake through the OFS mechanism reflects the parent company’s strategic approach to leveraging market dynamics while enhancing the visibility and brand presence of its Indian subsidiary.
Greater investor interest
The approval granted by the Securities and Exchange Board of India (SEBI) on September 24 further underscores the regulatory endorsement of this significant financial undertaking.
The implications of Hyundai’s IPO extend beyond mere fundraising; it marks the first initial public offering by an automobile manufacturer in India in over twenty years, following Maruti Suzuki’s listing in 2003.
The move is expected to foster greater investor interest and could signal a resurgence of IPO activity in the automotive sector.
Hyundai Motor India, which commenced operations in India in 1996, has established a diverse portfolio with 13 models catering to various market segments. The introduction of its IPO is poised to not only enhance the liquidity of its shares but also facilitate a robust public market for them. This strategic action highlights the growing confidence of foreign investors in India’s automotive landscape and serves as a testament to the potential for growth in this sector.
