Hyundai Motor India may file $2.5B IPO in coming weeks
What's the story
Hyundai's Indian subsidiary is preparing to submit a draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) in the coming weeks.
This action marks the initial step toward an initial public offering (IPO), a first for an automaker in India since Maruti Suzuki's listing in 2003.
If successful, the IPO could potentially raise around $2.5 billion, making it one of India's largest IPOs.
IPO size
Hyundai's IPO could rival LIC's 2022 offering
Bloomberg estimates that Hyundai Motor India's IPO could match the size of Life Insurance Corporation of India's 2022 IPO, which raised approximately $2.5 billion.
The company's DRHP is expected to be approved by SEBI within 60-90 days after submission.
This timeline suggests that the IPO could potentially be launched by September or October.
The successful listing could set a precedent for other automakers to follow suit, potentially reshaping the Indian automotive market.
Market strategy
Hyundai Motor India's strategic focus on SUVs
Hyundai Motor India has strategically focused on the SUV segment, which has proven to be successful.
In a recent sales call, the company's Chief Operating Officer Tarun Garg revealed that SUVs accounted for a record 67% of Hyundai's total sales in May.
The company's SUV range includes models such as Exter, Venue, Creta, Alcazar, Tucson, and Ioniq 5.
This market strategy has contributed to Hyundai's strong performance in India.
Sales data
Hyundai Motor India's sales performance and market share
In May, Hyundai Motor India's domestic vehicle dispatches to dealers increased by 1% compared to the same month last year, reaching 49,151 units.
The company's exports experienced a robust growth of 31%, rising to 14,400 units from 11,000 units in the year-ago period.
Despite the challenging market conditions, Hyundai's rural penetration remained strong at 20.1% in May.
These figures underscore the company's steady performance and market presence in India.