Hyundai IPO Coming Soon: Will It Become Another Big Hit Like The Maruti IPO?


Hyundai Motor Corporation, the South Korean automotive giant, is gearing up to list its Indian subsidiary, Hyundai Motor India Limited (HMIL), in what could be India’s largest-ever Initial Public Offering (IPO). Previously, it was reported that HMIL intended to launch its IPO later this year. However, the company has now taken steps to expedite the process by hiring merchant banks and law firms for the IPO in India. Reports suggest that regulatory papers for approval could be filed as early as May to June.

The Hyundai IPO is anticipated to be valued at approximately $3-3.5 billion (around Rs 25,000 crore), making it the largest IPO in India to date. This valuation could value Hyundai’s Indian operations at up to $30 billion. Currently, the record for India’s biggest IPO is held by Life Insurance Corporation of India (LIC IPO) at $2.6 billion (Rs 21,000 crore). Hyundai’s move to list its Indian arm underscores its commitment to the Indian market.

Hyundai has enlisted the services of prominent merchant banks such as JP Morgan, HSBC, and Citi, along with domestic Indian investment banks, to advise on its speculated $3 billion IPO in India. The IPO is expected to put Hyundai’s Indian arm’s valuation at more than half of its market capitalization of about $47 billion in Seoul.

For legal counsel, Hyundai has appointed Shardul Amarchand Mangaldas (SAM) as the counsel for the IPO of Hyundai Motor India Ltd. Additionally, the global law firm Latham & Watkins has been hired as international legal counsel. The selection of these firms highlights Hyundai’s commitment to ensuring a smooth IPO process and compliance with Indian regulatory requirements.

maruti suzuki showroom

The impact of Hyundai’s IPO on its rival Maruti Suzuki, India’s largest passenger car manufacturer, is of significant interest. Hyundai holds the second-largest market share in India, and its IPO could have implications for Maruti Suzuki’s market position. Hyundai’s strong performance in 2023, with record-breaking domestic sales of 6.02 lakh vehicles and a 10% increase in exports, reflects its growing presence in the Indian market.

Maruti Suzuki, on the other hand, has been steadily gaining market share, driven by the success of its SUV launches. However, Hyundai’s IPO could pose upside risks to Maruti Suzuki shares, particularly if Hyundai’s valuation is considered as a benchmark. Analysts suggest that Maruti Suzuki could trade at similar valuations as Hyundai, considering factors such as Suzuki’s significant presence in India and Hyundai’s global standing.

Hyundai’s IPO marks a significant development in India’s automotive industry, with implications for both Hyundai and its competitors like Maruti Suzuki. The IPO could potentially reshape the competitive landscape and investor sentiment in the Indian automotive market.

 

The post Hyundai IPO Coming Soon: Will It Become Another Big Hit Like The Maruti IPO? first appeared on Cartoq.



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