Hyundai Motor India files draft papers with Sebi for record IPO of around $3 billion

South Korean auto giant Hyundai Motor Co’s Indian arm Hyundai Motor India Limited has filed draft papers with market regulator Sebi to raise around $3 bn via an initial public offer (IPO) at a targeted valuation between $18 bn to $20 bn, multiple sources in the know told Moneycontrol on the condition of anonymity.

If the listing plans fructify, this deal, a pure OFS or offer for sale by the promoter, would be India Inc’s biggest-ever IPO and beat the earlier record set by state-owned LIC’s $2.7 bn listing in 2022.

On July 14, Moneycontrol had reported that the Indian unit of the auto giant would shortly file papers with the regulator.

“The objects of the offer are to carry out the Offer for Sale of up to 142,194,700 Equity Shares of the face value of Rs 10 each by the Promoter Selling Shareholder and to achieve the benefits of listing the Equity Shares on the Stock Exchanges,” said the July 14 draft red herring prospectus (DRHP) reviewed by Moneycontrol.

“Further, our Company expects that listing of the Equity Shares will enhance our visibility and brand image and provide liquidity and a public market for the Equity Shares in India,” the DRHP added.

If required and depending on the roadshows and market conditions, the firm might explore a pre-IPO round at a later stage as a de-risking strategy, sources added.

Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital and Morgan Stanley are the i-banks advising on the transaction with law firm Shardul Amarchand Mangaldas acting as the company counsel and Latham and Watkins acting as the international counsel.

On May 24, Moneycontrol had reported that the filing of draft papers by Hyundai’s India unit was expected by the end of June and the firm was looking to raise between $2.5 bn to $3bn.

Citi, JP Morgan and HSBC Securities had been engaged previously for the high-profile deal, Moneycontrol had reported on February 9.

Also Read: Hyundai picks Shardul Amarchand, Latham as legal advisors for India IPO

Hyundai Motor India Limited was India’s second largest carmaker after Maruti Suzuki in FY24 in terms of passenger sales volumes.

The share price of rival Maruti Suzuki India has risen by 24.35 per cent in the last six months. The market leader has a market cap of around Rs 4,00,000 crore or nearly $48 bn.

Hyundai’s India unit ended FY23 with revenue of Rs 60,000 crore and profits of Rs 4,653 crore, the highest amongst the non-listed car manufacturers in the country, according to Autocar Professional. India is a significant market that accounted for around 13 percent of Hyundai’s global sales in 2023. i20, Verna, Creta, Aura and Tucson are some of the firm’s car models in the Indian market.

The India unit clocked the highest-ever domestic sales in 2023, crossing the six-lakh mark.

The Economic Times was the first to report the India listing plans of Hyundai on February 5. Responding to media reports, Hyundai Motor Co issued an official statement to the Korean Stock Exchange on February 7. Hyundai said that as a global company, it is constantly reviewing various activities, including listing overseas subsidiaries, to increase corporate value, but nothing has been confirmed to date.

Hyundai Motor Group’s Executive Chair Euisun Chung made a visit to India last month to review the firm’s mid to long -term mobility strategies.