• Thursday, March 13, 2025

Business

Hyundai Motor India may launch its initial share sale on Oct 14

Hyundai Motor’s proposed IPO is entirely an Offer-for-Sale of 142,194,700 equity shares by its South Korean promoter, with no fresh issue component

Hyundai Motor India MD & CEO Unsoo Kim, and COO Tarun Garg, at the launch of the new Hyundai Alcazar vesion in New Delhi, Monday, September 9, 2024. (PTI Photo)

By: Shajil Kumar

HYUNDAI Motor India Ltd is expected to launch its much-awaited ₹250 billion (£2.27bn) initial share-sale for public subscription on October 14 by its South Korean parent, people familiar with the development said on Thursday.

This would be the largest initial public offering (IPO) in India after LIC’s initial share sale of ₹210 billion.

According to the Draft Red Herring Prospectus (DRHP) filed in June, the proposed IPO is entirely an Offer-for-Sale (OFS) of 142,194,700 equity shares by promoter Hyundai Motor Company of South Korea, with no fresh issue component.

Sources had previously stated that the South Korean automaker is looking to raise at least $3bn (₹250bn) by diluting a 15-20 per cent stake.

This development marks a significant milestone, as it is the first automaker’s initial share sale in over two decades, following Japanese automaker Maruti Suzuki’s listing in 2003.

The South Korean parent is diluting some of the stake through the OFS route. Since the public issue is completely an OFS, Hyundai Motor India Ltd, which is the second largest carmaker in India after Maruti Suzuki India, will not receive any proceeds from the IPO.

The automaker received approval from the Securities and Exchange Board of India (Sebi) on September 24 to float its IPO.

In its draft papers, Hyundai Motor India stated that it expects that the listing of the equity shares “will enhance our visibility and brand image and provide liquidity and a public market for the shares”.

Hyundai Motor India commenced operations in India in 1996 and currently sells 13 models across segments.

The IPO launch comes at a time when the primary market is experiencing strong interest from both issuers and investors across various sectors.

So far this year, 62 companies have already mobilised around ₹640bn (£5.81bn) collectively via mainboard, marking a 29 per cent increase from ₹494.36bn (£4.48bn) collected by 57 firms through the route in the entire 2023.

The strong momentum in IPO markets is driven by several key macroeconomic, sector-specific factors and the willingness of fund managers to look at new ideas which is partially led by strong inflows into domestic mutual funds as well as the robust capital formation happening across corporate India, experts said. (PTI)

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