MUMBAI: South Korea's Hyundai Motor is planning to sell up to 17.5% of its India arm equity in what could end up being the country's largest-ever initial public offering (IPO). The carmaker hopes to raise $2.5–3 billion from the sale of its initial shares, according to Draft Red Herring Prospectus (DRHP) documents it filed with the Securities and Exchange Board of India (SEBI) on June 15. 

If the issue goes through the auto major would enable the company to generate nearly  Rs 25,000 crore, leaving LIC — the biggest-ever IPO of India — by a considerable margin. Experts added that Hyundai India IPO valuations indicate that the upcoming auto stock in the Indian market may outperform its leading peers like Maruti Suzuki, Tata Motors and Mahindra & Mahindra among others. 

The DRHP stated, "The objects of the offer are to carry out the offer for sale of up to 142,194,700 equity shares of the face value of Rs 10 each by the Promoter Selling Shareholder and to achieve the benefits of listing the equity shares on the stock exchanges." It further says, "Further, our company expects that listing of the Equity Shares will enhance our visibility and brand image and provide liquidity and a public market for the equity shares in India."

According to media reports citing company sources if necessary, and based on roadshows and market conditions, the company may consider a pre-IPO round at a later stage as a risk mitigation strategy. Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital, and Morgan Stanley are the investment banks advising on the transaction, with Shardul Amarchand Mangaldas serving as the company counsel and Latham and Watkins as the international counsel.

The media report also cites that India represented about 1 per cent of Hyundai's global sales in 2023, with popular models such as i20, Verna, Creta, Aura, and Tucson contributing to its presence in the Indian market. Hyundai's India division concluded FY23 with revenues amounting to Rs 60,000 crore and profits reaching Rs 4,653 crore, marking the highest among unlisted car manufacturers in the country.