By Dhwani Pandya
MUMBAI (Reuters) -Hyundai Motor plans to use proceeds from a $3.3 billion IPO of its Indian unit to enhance its research efforts and develop new cars, aspiring to transform the South Asian country into a manufacturing hub for emerging markets.
Asked how the IPO proceeds would be used, Unsoo Kim, managing director of Hyundai’s Indian unit, said the automaker will “invest aggressively in new products, future technology and research and development capabilities of the India unit”.
Hyundai is due to launch the initial public offering – India’s biggest ever – next week. It will set a value of up to $19 billion for its business in India, the world’s third-biggest car market, where Hyundai competes with market leader Maruti Suzuki and rivals such as Tata Motors.
Hyundai’s South Korean parent will offload a stake of up to 17.5% in the Indian unit, gaining its first stock market listing outside its home country and becoming the first automaker to go public in India since Maruti Suzuki in 2003.
“India is one of the most exciting auto markets in the world … (The) IPO will ensure that Hyundai Motor India is even more dedicated to success in India,” Kim told a press briefing in Mumbai on Wednesday.
The IPO, the world’s second-biggest in 2024, comes as Indian stock markets scale record highs.
Hyundai is India’s second-largest carmaker by sales, with about 15% share of the country’s passenger vehicle market versus Maruti Suzuki’s more than 40% share.
Since entering the Indian market 28 years ago, it has gained popularity for its affordable cars such as the Santro and sports-utility vehicle Creta. The company plans to launch new electric vehicles, establish charging stations and introduce hybrid cars in India starting in 2027.
The IPO, to be priced in the range of 1,865 to 1960 rupees, opens on Monday for big institutional investors, and on Oct. 15-17 for retail and other categories. The stock is set to start trading in Mumbai on Oct. 22.
At the upper end of that price range, the share sale values Hyundai India at around $19 billion compared with Maruti Suzuki’s $48 billion market capitalization in India.
Hyundai currently has one manufacturing unit in India for local sales and exports, with a second plant expected to begin production in 2025.
“We intend to become a global manufacturing hub for Hyundai for the emerging markets,” said Tarun Garg, Chief Operating Officer of Hyundai India. “In next 3-4 years, 30% increase in production will improve our domestic and export volumes.”
(Reporting by Dhwani Pandya in Mumbai, additional reporting by Nandan Mandayam in Bengaluru, Writing by Aditi Shah and Aditya Kalra; Editing by Jacqueline Wong and Catherine Evans)
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