Hyundai Motor Group's Indian subsidiary has officially launched its initial public offering (IPO) plan, expected to raise $3.3 billion, setting a record for the largest IPO in Indian history. This IPO was initiated on Monday in Mumbai, India's financial hub, and is anticipated to become the second-largest global IPO of 2024.

According to regulatory filings, Hyundai India's IPO will not issue new shares but will instead involve the South Korean parent company selling up to 17.5% of its stake in its fully-owned Indian subsidiary, which could be valued at a maximum of $19 billion. At this valuation, Hyundai India's market capitalization would account for approximately 40% of the total market capitalization of its parent company, Hyundai Motor.

The IPO plans to issue 142 million shares with a price range of 1,865 to 1,960 rupees per share. This will be Hyundai Motor's first listing outside of its home market in South Korea. Institutional investors can apply for shares starting from Monday, while retail investors and other investors can purchase shares on Tuesday and Wednesday. The shares are scheduled to be officially listed and traded on the Bombay Stock Exchange on October 22nd.

Global Second Largest IPO

Hyundai India's IPO also reflects the booming Indian capital market. Data from the London Stock Exchange Group (LSEG) shows that, as of 2024, 260 companies have raised over $9 billion through IPOs, already surpassing the total of $7.42 billion for the entire year of 2023.

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If Hyundai India's IPO is successful, it will become the largest IPO in Indian history, surpassing the $2.5 billion raised by the Life Insurance Corporation of India in 2022. Globally, Hyundai's IPO this year will be the second-largest, following the $5.1 billion IPO raised by the American company Lineage Inc. in July.

Expanding Market Presence in India through IPO

Hyundai Motor Group is leveraging the IPO to expand its market presence in India. The funds raised from the IPO will be used to strengthen Hyundai's position in the Indian automotive market, enhance its production capabilities, and invest in research and development for electric vehicles and other innovative technologies. This move is in line with Hyundai's global strategy to increase its market share and compete with other major automakers in the rapidly growing Indian market.Analysts believe that Hyundai Motor may expand its production scale in India, possibly including the production of hybrid and electric vehicles. This will help Hyundai strengthen its position in the Indian market, as India is increasingly focusing on environmentally friendly cars.

Kiwoom Securities analyst Shin Yoon-chul said that Hyundai Motor will obtain a large amount of investment funds in India to expand production through the funds raised from this IPO, which will help narrow the gap in market share with the largest player in the Indian market, Maruti Suzuki. He also said that the timing of the IPO is very good now, as the performance of the automotive industry has always been ahead of the Indian stock market.

Hyundai Motor is the second-largest automobile manufacturer in India, second only to Maruti. In order to compete for more market share, Hyundai plans to expand its SUV models. Hyundai plans to launch its first India-made electric vehicle at the beginning of next year and plans to start launching at least two gasoline models tailored for the Indian market in 2026.