Hyundai Motors is poised to make a significant market entry as the Securities and Exchange Board of India (SEBI) has given the green light to the company’s draft red herring prospectus for a ₹25,000 crore IPO.
This IPO is expected to launch in October and could potentially surpass the previous record set by LIC’s ₹21,008 crore IPO.
Market Context and Previous IPOs
The upcoming Hyundai IPO may eclipse other substantial market entries, including Paytm’s ₹18,300 crore IPO in November 2021,
Coal India’s ₹15,199 crore IPO in November 2010, and Reliance Power’s ₹11,563 crore IPO in February 2008.
Notably, Hyundai’s IPO will consist solely of a sale proposal from its Korean parent company, with no new shares being issued.
Impact on Market Valuation
Hyundai is anticipated to dilute about 17% of its equity in this offer, aiming for a valuation of approximately $18 billion.
For comparison, Maruti Suzuki currently leads the Indian automotive sector with a market cap of around ₹4 lakh crore,
followed by Mahindra & Mahindra at ₹3.8 lakh crore and Tata Motors at ₹3.6 lakh crore.
Future Plans and Expansion
Ahead of its IPO, Hyundai has outlined ambitious expansion plans, intending to ramp up its annual production capacity in India to one million units by 2025.
The company aims to focus on affordable electric vehicles and plans to establish local manufacturing capabilities.
A substantial investment of ₹32,000 crore is set for business expansion,
including the acquisition of a new factory in Maharashtra previously owned by General Motors.
