Hyundai Motor, the well-known South Korean automaker, has revealed plans to dilute up to 17.5% of its interest in its Indian affiliate through an initial public offering (IPO). According to Reuters, this huge action is likely to raise $2.5 billion to $3 billion.
Filing for an IPO
Hyundai plans to file draft IPO documents on Friday. The anticipated IPO will be a historic event because it will be the first public offering by a carmaker in India in nearly 20 years. The last such event was Maruti Suzuki’s initial public offering in 2003.
Hyundai’s Market Position
Hyundai is currently India’s second-largest automobile manufacturer, following Maruti Suzuki India. The firm sees this IPO as a strategic chance to capitalise on India’s increasing market potential, which is Hyundai’s third-largest revenue market after the United States and South Korea.
Investment Banks on Board
To assure the success of this IPO, Hyundai has hired numerous well-known investment banks. These include Citibank, Kotak Mahindra, Morgan Stanley, JP Morgan, and HSBC. These banks will play an important role in enabling Hyundai’s entry into the public market, providing knowledge and help along the way.
Regulatory approval
SEBI will assess the draft papers for the IPO. The market regulator is anticipated to take 60 to 90 days to complete its review and grant approval. If everything goes as planned, Hyundai Motor India’s IPO could potentially be launched by September or October this year.
Sales Performance
Hyundai announced a significant increase in year-over-year sales. In May 2024, the company sold 63,551 units, up 7% from 59,601 units sold in the same month last year. This rise demonstrates Hyundai’s robust market presence and operational effectiveness in India.
Conclusion
Hyundai Motor’s intention to dilute its stake through an IPO is a significant milestone in India’s automotive industry. Hyundai intends to increase its market position and continue its growth trajectory by partnering with premier investment banks and taking a strategic approach to entering the Indian market. The successful conclusion of this IPO may open the door for other automakers to pursue similar chances in India’s dynamic market.
Source: Hyundai to dilute 17.5% stake in $3 billion IPO: Report (msn.com)
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