Hyundai Eyes $3B India IPO, Estimated Valuation of $25-30B

Hyundai Motor Co, the South Korean automaker, is considering listing its Indian unit in the country’s booming IPO market, according to two sources who have been briefed on the matter. Hyundai Motor India is in early stage talks for the initial public offering and has held discussions with several banks, the sources said.

India’s largest IPO ever

If the company goes public at this valuation, it will make it the biggest IPO surpassing LIC’s issue size of Rs 21,000 crore. Hyundai is exploring a 15-20% dilution to raise $3.3-5.6 billion (₹27,390 crore to ₹46,480 crore), people said. A spokesperson at the South Korean automaker’s India unit declined to comment.

At a $25-30 billion valuation, Hyundai’s India operation would be valued at more than half of its market capitalisation of $42 billion in Seoul. Hyundai Motor India was India’s second-largest passenger vehicle seller last year, after Maruti Suzuki India.

Value-up programme

Analysts tracking Hyundai Motor India said a listing of the Indian subsidiary would be part of South Korea’s ‘value-up’ programme, aimed at improving the valuation of underperforming stocks and slashing the so-called ‘Korea discount’ in the financial markets. South Korean automakers are trading at a low price-to-earnings (P/E) ratio of 4.1-4.6, compared with 7.3 for Japanese rivals and 5.4 for those in the US. Subsidiaries based in growth markets such as India could potentially trade at superior P/E multiples than their parents.

Diwali listing

Hyundai Motor India is considering listing its IPO around Diwali this year, marking its entry into the Indian stock market after 28 years. The company has pledged to launch five EV models by the end of the decade in India and invest Rs 20,000 crore in electrification, after the visit of Hyundai Motor Group chairman Euisun Chung.