Yahoo Finance Hyundai Aims to Raise Up to $3.3 Billion in Record India IPO
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Hyundai Motor Co. is seeking to raise as much as $3.3 billion through an initial public offering of its Indian unit, kicking off the country’s biggest-ever listing.
India’s second-biggest carmaker by sales, which has sold nearly 12 million passenger vehicles since entering the market 26 years ago, set the share price range at 1,865 rupees ($22) to 1,960 rupees a piece, according to terms of the deal obtained by Bloomberg News.
Hyundai Motor India Ltd. is counting on rural demand and a rapid shift toward electric vehicles to drive sales in what’s the world’s no. 3 automobile market. India saw total new car sales top five million last year, as the nation with the fastest-growing major economy turns wealthy.
The 21% sales the company recorded in rural areas last month was “one of the highest we have ever achieved,” Chief Operating Officer Tarun Garg said in an interview in Mumbai on Wednesday. Hyundai’s India Managing Director Unsoo Kim, who was also present, said he believes the EV market will likely grow strong, although India is still in the early stages of electrification.
With Hyundai selling as many as 142.2 million shares, or a 17.5% stake, the IPO effectively values the company at $19 billion if shares are priced at the top end of the range, the terms showed, confirming a Bloomberg News report on Friday.
The unit isn’t selling any new shares in the IPO and the entire proceeds of the sale will go to the parent firm. The IPO will open for bids next week from Oct. 15 to Oct. 17, and shares are expected to start trading from Oct. 22, according to the red herring prospectus published Tuesday. Anchor investors can put in orders on Monday.
The listing of Hyundai’s India unit is set to break the record set by Life Insurance Corp. of India, which raised $2.7 billion in 2022. It would also be one of Asia’s biggest IPOs in recent years.
Investor enthusiasm over India’s high growth rate and lofty valuations have encouraged a record number of companies to go public, making the nation the world’s busiest IPO market. More than $9 billion has been raised through over 250 IPOs so far this year, and more large listings are in the pipeline, including that of Indian food-delivery platform Swiggy Ltd.
India’s IPO market has been on a tear as a steady stream of inflows from savers has helped buoy stocks and boost liquidity, prompting multinational firms and private equity sponsors to consider monetizing their holdings in the country.
Hyundai’s advisers for the share sale are Kotak Mahindra Bank Ltd., Citigroup Inc., HSBC Holdings Plc, JPMorgan Chase & Co., and Morgan Stanley, according to the share sale document.
--With assistance from Baiju Kalesh and Dave Sebastian.
(Updates with comments from company executives in the fourth paragraph.)
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