Hyundai launches mega IPO in India

Hyundai India plans to begin accepting subscriptions for its impressive IPO in Mumbai on Monday. With a volume of $3.3 billion, this IPO will be the largest in India's history and the second-largest globally in 2024. India's hot capital markets show no signs of cooling down. According to LSEG data, 260 companies have already raised over $9 billion in 2024, significantly surpassing last year's volume of $7.42 billion. In placing this IPO, Hyundai will not issue new shares. Rather, the South Korean parent company plans to sell up to 17.5% of its stake in the Indian subsidiary, which will eventually be valued at up to $19 billion. This would make Hyundai India about 40% of the market capitalization of its parent company, Hyundai Motor. The offering includes 142,194,700 shares at a price range between 1,865 and 1,960 rupees, marking Hyundai's first IPO outside South Korea. Institutional investors can submit their bids starting Monday, while retail and other investors can follow on Tuesday and Wednesday. Trading in Mumbai is scheduled to begin on October 22nd. Analysts anticipate that Hyundai Motor could expand its production in India, possibly including hybrid and electric vehicles. This would help the South Korean automaker strengthen its position in the Indian market as the country increasingly focuses on environmentally friendly vehicles. According to Shin Yoon-chul of Kiwoom Securities, the capital collected through the IPO provides Hyundai Motor with substantial investment capacity to narrow the market share gap with India's leading provider Maruti Suzuki. The IPO is also well-timed, as the automotive sector is leading the Indian stock exchange in terms of performance. If successful, Hyundai India's IPO could surpass the previous record of the Life Insurance Corporation of India's 2022 deal, which raised $2.5 billion. Globally, the IPO will rank as the second-largest after Lineage Inc's $5.1 billion US IPO in July. Hyundai is India's second-largest automaker behind Maruti and plans to secure market share from domestic competitors by expanding its SUV offerings. Additionally, the introduction of the first locally manufactured electric vehicle in India is planned for early next year, with at least two market-tailored gasoline models to follow from 2026 onwards.