Hyundai likely to go public with India arm

Hyundai's debut on Diwali: India's second-largest by numbers, Hyundai Motor is likely to list its Indian unit to raise at least $3 billion in what would be the country's biggest IPO. The South Korean auto maker has seen two-fold increase in the key growth market ahead of a widely expected entry by Tesla.

Hyundai Motor India is said to be in early talks for an initial public offering (IPO) and has held discussions with several banks, the persons privy to the matter were quoted by a wire agency. However, repeated requests for a comment went unanswered by Hyundai India. 

As per reports, the fund raising by Hyundai, the second-biggest automaker in India with a 15 per cent market share, would value its Indian operation at up to $30 billion, which is more than half its market capitalisation of $42 billion in Seoul. Shares of the company soared 5 per cent on Monday, to their highest in nearly three years.

A valuation of up to $30 billion would put Hyundai's India unit behind rivals like Tata Motors at $41.43 billion and Maruti Suzuki India at $40.11 billion. Hyundai is exploring "value unlocking for its India business" through the IPO, the two people said.

Backed by infusion of robust domestic and foreign money, the strong $4 trillion stock market in India is catching up fast as an alternative to China, recently overtaking Hong Kong as the fourth-largest in the world.

India's benchmark Nifty 50 index rose 20 per cent in 2023 and has extended its record run into 2024.

IPOs in India boomed in the second half of 2023 and bankers expect this to continue in 2024 amid hopes of policy stability. SoftBank-backed Ola Electric and food delivery firm Swiggy, among others, are expected to list this year.

For its India IPO, Hyundai is said to be talking with investment banks JP Morgan, Morgan Stanley, Citi and Bank of America though no formal appointments have been made, the two people said.

Hyundai's India Push 

Hyundai, India's second-largest car maker by sales, is now doubling down in the South Asian nation and the United States after scaling back its production in China after years of losses there and exiting Russia after selling its two Russian plants.

It entered India more than two decades ago and is the only foreign player to have become dominant alongside market leader Maruti Suzuki, while companies like Ford Motor and General Motors have folded their India business.

Hyundai's share of the Indian market reached a peak of nearly 20 per cent mainly due to its wide portfolio of small cars and a grasp of what buyers want, but it is seeing growing competition from domestic players like Tata Motors which has launched a slew of new SUVs and electric cars.

(With Reuters inputs)