If the plan goes ahead, it will be the first IPO by an Indian automaker in more than 20 years since Maruti Suzuki went public in 2003.
Expanding
After filing the DRHP, Hyundai Motor India’s management plans to begin investor roadshows in domestic and international markets from next month, ET reported, adding that the information was shared by an investment banker who requested anonymity due to the confidentiality of the discussions.
Sebi is expected to grant its approval within 60-90 days of the DRHP filing, a timeline that suggests Hyundai Motor India’s IPO could make its market debut by September or October.
Hyundai’s IPO plans
The company has engaged several prominent investment banks including Citibank, Morgan Stanley, Kotak Mahindra, HSBC and JP Morgan to lead the IPO process.
The carmaker is looking to capitalise on the strong performance of the Indian stock market, which has delivered an astounding 14 per cent annualised return over the past decade and ranks among the top five best-performing markets in the world.
The financial publication reported in February that Hyundai Motor is looking to value its Indian unit at $22 billion to $28 billion and plans to sell a 15% to 20% stake through an IPO, an offering by its Korean parent.
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A senior fund manager at a major domestic fund said if Hyundai achieves its target valuation, it could lead to a revaluation of India’s auto sector, benefiting Maruti Suzuki in particular and deepening the domestic auto market.
Maruti Suzuki is currently Hyundai’s biggest rival among listed Indian companies, and analysts at a local brokerage say Hyundai is expected to be valued significantly higher than Maruti Suzuki, and for good reason.
“Over the last few years, Hyundai has been able to capitalise on the growing preference for SUVs in the Indian market,” the analyst said.
The analyst also said that compared to Maruti, Hyundai has been aggressive in launching new models, integrating latest technologies and introducing vehicle features, which has helped Hyundai exert better pricing power and strengthen its position in the premium market.
Hyundai Chief Operating Officer Tarun Garg said during the company’s recent monthly sales conference call that SUVs recorded 67% of the company’s total sales in May. Hyundai’s SUV lineup includes models like Ecstar, Venue, Creta, Alcazar, Tucson and Ioniq 5.
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