Hyundai Motor India likely to launch Rs 25,000 crore IPO on Oct 14

Hyundai Motor India Ltd, the Indian arm of South Korean automaker Hyundai, is expected to launch its much-awaited Rs 25,000-crore initial share-sale for public subscription on October 14, 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 Rs 21,000 crore.

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

Sources had previously stated that the South Korean automaker is looking to raise at least USD 3 billion (about Rs 25,000 crore) through an initial share sale.

This development marks a significant milestone for the Indian industry, 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".

In February this year, sources confirmed that the South Korean automaker is planning to garner at least USD 3 billion through an IPO. It may dilute a 15-20 per cent stake to raise funds in the range of USD 3.3-5.6 billion.

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

In September, electric two-wheeler company Ola Electric Mobility got listed on the bourses after successful completion of its Rs 6,145 crore initial share sale.

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 Rs 64,000 crore collectively via mainboard, marking a 29 per cent increase from Rs 49,436 crore 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 willingness of funds 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.