Introduction

Hyundai Motor is planning to list its Indian unit to raise at least $3 billion in what would be the country’s biggest IPO, according to sources.

The fund raising by Hyundai, the second-biggest automaker in India with a 15% market share, would value its Indian operation at up to $30 billion, which is more than half its market capitalisation of $42 billion in Seoul.

Hyundai has held talks with several banks, including JP Morgan, Morgan Stanley, Citi and Bank of America, though no formal appointments have been made, the sources said.

Background

Hyundai entered the Indian market in 1998 and has since become a dominant player, offering a range of models from hatchbacks to SUVs.

Hyundai now has about a 15% share of the Indian car market where it sold 567,000 vehicles in the last fiscal year.

Hyundai is also investing heavily in India’s electrification efforts, launching its first electric SUV, the Kona, in 2019 and planning to introduce more models in the future.

Hyundai is also developing AI tools for under-resourced languages in India, such as speech and text translation, in collaboration with local villagers.

Motivation

Hyundai is exploring “value unlocking for its India business” through the IPO, the sources said.

They want to make use of India’s IPO boom, which is boosted by billions of dollars of domestic and foreign money, and the country’s policy stability.

India’s $4 trillion stock market has emerged as a fast-growing alternative to China, recently overtaking Hong Kong as the fourth-largest in the world.

India’s benchmark Nifty 50 index rose 20% in 2023 and has extended its record run into 2024.

IPOs in India boomed in the second half of 2023 and bankers expect this to continue in 2024. Some of the expected listings include Ola Electric, Swiggy, and Zomato.

Hyundai’s IPO would be the largest in India’s history, surpassing the 2022 listing of Life Insurance Corporation, which raised up to $2.7 billion.

Implications

Hyundai’s IPO would be a significant milestone for the company and the Indian auto industry, as it would reflect the confidence and potential of the market.

Hyundai’s IPO would also attract more investors and customers to its products and services, especially in the areas of electric vehicles and AI solutions.

Hyundai’s IPO would also put pressure on its rivals, such as Tata Motors, Maruti Suzuki, and Kia Motors, to compete more aggressively and innovate more rapidly.

Hyundai’s IPO would also have an impact on the GDP growth of India, as the company’s CEO Satya Nadella said that AI will have an impact on the GDP growth of India, and that countries that adopt the technology will have the chance to expand their expertise and push up economic growth.

contact for removal and copyright or correction – copyright@bullishmaze.com

Leave a Reply

Your email address will not be published. Required fields are marked *