Hyundai mulls over IPO offering: 5 things to know

The Indian division of South Korean automaker Hyundai Motor Co., Hyundai Motor India (HMIL), is considering filing its initial public offering (IPO) on Indian exchanges.

According to Reuters, if the South Korean automakers follow through on its intentions, it would be the largest initial public offering (IPO) in India's history.

In the meantime, the company has also inked a Memorandum of Understanding (MoU) with Maharashtra's Industries Minister, Uday Samant, in Davos. Hyundai Motor India Ltd has agreed to invest ₹6,000 crore in Maharashtra by January 2024, Mint reported.

Here are 5 things you should know about Hyundai’s possible IPO in India:

1. Hyundai is mulling a $3 billion IPO for its Indian subsidiary, which could be one of the country's largest stock market listings. The corporation is considering this move to increase the value of its business in India, capitalizing on the country's IPO boom and its own large investment in India's electrification efforts.

2. The IPO may possibly value Hyundai's Indian company between $25 billion and $30 billion, influencing the competitive landscape, notably in the electric vehicle (EV) industry. This initiative may provide a threat to other key participants in the Indian automotive sector, including as Tata Motors, and might also damage Tesla's prospective market share in India.

3. Hyundai is to invest approximately $2.45 billion in India as part of its electrification plans, which include the development of charging stations and a battery pack assembly factory. The company's strong position in India, where it controls 15% of the car market, emphasizes the strategic relevance of this prospective IPO.

4. While Hyundai has been in discussions with investment banks like JP Morgan, Morgan Stanley, Citi, and Bank of America about the IPO, no formal appointments have been made. This is the initial stage of the IPO planning process.

5.The possible IPO underscores Hyundai's long-term commitment to the Indian market, where it has been a prominent player for more than two decades. The company's decision to pursue an IPO is also a response to the current strength of India's financial markets in comparison to those of other nations, emphasizing the strategic importance of this step for Hyundai.

(With Reuters inputs)