Hyundai to invest USD 3.3 billion from record IPO in India for new cars and R&D

Hyundai Motor Company's India unit plans to go public next week, embarking on a record-breaking initial public offering (IPO) that will enable it to raise some USD 3.3 billion. The deal, which is India's largest IPO in history, is seen bolstering India's position as an investment hub for emerging markets.

Hyundai's Indian operations will be valued at about USD 19 billion, competing with Maruti Suzuki, the country's top ranked carmaker, and Tata Motors, the third biggest by volume. Managing Director of Hyundai’s Indian unit Unsoo Kim said that the money will be used to boost research and development (R&D), introduce new products, and also invest in future technologies.

Hyundai is selling 17.5 percent of its stake in the Indian subsidiary, which, if approved by its shareholders, would be the automaker's first stock market listing outside of South Korea and the first automaker to list on the stock exchange in India since Maruti Suzuki's listing in 2003. “IPO is crucial for India. India is one of the most exciting auto markets in the world,” Kim said. With this IPO, Hyundai Motor India is bound to achieve greater success in India.”

However, the overall growth in car sales has been slowing, and the IPO comes at a time when Indian stock markets are on record highs. Hatchback and small car sales, which make up about 30% of the market, have been hit by recent inflationary pressures on mid-income buyers but sales of SUVs have been steady.

Since 28 years ago when Hyundai entered the market with its Santro model, the South Korean auto major has been a significant player in the Indian automotive landscape. In 2027, it plans to launch hybrid models and expand its electric vehicle offering as well as set up charging stations.

Shares in the IPO will be priced between 1,865 and 1,960 rupees from Monday, and will be allotted to institutional investors first, from Oct 15 to 17. Mumbai will start trading on October 22. After this IPO, Hyundai plans to ramp up production capacity in India, announcing plans for a second manufacturing plant that will go into production in 2025, bringing total capacity up to well over one million units per year.