Hyundai Motor’s Indian subsidiary is gearing up for a significant milestone as it plans to submit a draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) within the next two weeks. This submission will initiate their journey toward an initial public offering (IPO), potentially marking the first IPO by an automaker in India since Maruti Suzuki went public in 2003.
As the second-largest automaker in India, Hyundai commands a 15% market share and is aiming for a valuation of up to $30 billion for its local operations. The planned IPO, valued at approximately $3 billion, would be the largest ever in India. To guide this substantial financial endeavor, Hyundai has enlisted the expertise of investment bankers JPMorgan and Citi. A potential market debut for Hyundai Motor India’s IPO by September or October
Hyundai India has demonstrated robust performance, selling a record 602,000 vehicles in 2023, a 9% increase over the previous year. Its export figures also saw a rise, with 163,000 units shipped abroad, reflecting a 10% growth from the prior year.
In the competitive landscape, Maruti Suzuki, India’s largest passenger car manufacturer, has reported market share gains, driven by the successful launch of new SUV models such as the Brezza, Grand Vitara, and Fronx. Meanwhile, Hyundai Motors India maintains a solid position as the second-largest passenger vehicle OEM with a 14.9% market share in FY24 year-to-date.
Analysts project Hyundai India’s valuation between $22 billion and $28 billion, suggesting potential upside for Maruti Suzuki shares, depending on the valuation scenarios and discounts applied. Hyundai plans to sell a 15-20% stake through the IPO, which will be an offer for sale by its Korean parent company.
If Hyundai achieves its target valuation, it could significantly impact the Indian automobile sector, potentially prompting a revaluation and benefiting companies like Maruti Suzuki. Moreover, a successful IPO could set a new benchmark for other automakers, boosting investor confidence in the Indian automotive industry.
Hyundai’s move towards an IPO reflects its confidence in the Indian market and underscores the growing significance of the automotive sector in the country’s economy. This landmark event could pave the way for future listings and signal a new era of growth and investment in industry.
