South Korean carmaker’s shares extend gains after Hyundai Motor India files for IPO

Riding high on positive investor sentiment, Hyundai Motor Co's stocks touched a record high on the Korea Composite Stock Price Index (KOSPI) on Monday, June 17. The auto giant’s stocks have been on a rally after the company’s Indian arm filed documents with the market regulator Securities and Exchange Board of India (SEBI) for its proposed initial public offering (IPO).

Hyundai Moto stock rose over 6% to 2,85,000 won ($206.47 or ₹17,098) on June 17. Following correction at the day's high, the stocks closed 3.9% higher even as the benchmark KOSPI was down 0.5% at close. The company’s market capitalisation stood at over 58.3 trillion won at the end of day's trade. On Tuesday, the stock also closed 1.62% higher at 283,000 won ($204.29 or ₹17,041.60) on the KOSPI.

The Indian arm of Hyundai Motor filed the Draft Red Herring Prospectus (DRHP) for its IPO last week. The South Korean carmaker plans to raise $3 billion (₹25,000 crore) through the IPO with a valuation between $18 billion to $20 billion, reports indicate.

Also Read: Check 5 biggest IPOs in Indian history

Hyundai Motor intends to dilute a stake of up to 17.5% through the public issue. If approved, Hyundai’s IPO, a pure offer for sale by the promoters, will become the largest public issue in India, surpassing LIC’s nearly ₹21,000 crore IPO in 2022.

SEBI could take up to two months to give a green signal to the public issue, post which the company will be able to initiate the launch of the IPO.

The company reportedly has roped in Kotak Mahindra Bank, Citi Bank, Morgan Stanley, JP Morgan, and HSBC Bank to carry out the public issue smoothly.

India’s second-largest carmaker in the passenger car segment, Hyundai, has set an ambitious plan for further expansion. The company plans to invest $2.45 billion in the country for its electrification push, with plans to launch new electric vehicles (EVs), charging stations, and a battery pack assembly unit.

A key player in the highly competitive Indian car market for over two decades, Hyundai rivals with the likes of Maruti Suzuki and Tata. The company controls a 15% share of the Indian car market. India is the third largest revenue generator for Hyundai, after the United States and South Korea.

Hyundai Motors' proposed IPO will also be the first public offer by an automotive company in over two decades. Maruti Suzuki India Limited (MSIL) launched its IPO back in 2003.

To know more about IPOs listing, schedule and upcoming IPOs, click here