Mumbai (Business Emerge), October 9: Hyundai Motor Company is set to make a significant impact on the Indian automotive sector by channeling the proceeds from its upcoming initial public offering (IPO) into research and development as well as new vehicle innovations. The $3.3 billion IPO of its Indian division, anticipated to be the largest ever in India, is aimed at establishing the country as a key manufacturing hub for emerging markets.
The company’s IPO is projected to value its Indian business at approximately $19 billion, positioning it within the world’s third-largest automotive market. This move will see Hyundai competing against established players like Maruti Suzuki and Tata Motors. Unsoo Kim, managing director of Hyundai’s Indian operations, emphasized that the funds will be directed towards aggressive investments in future technologies and enhancing the research and development capabilities of the Indian unit.
Hyundai’s South Korean parent company will be divesting a stake of up to 17.5% in its Indian subsidiary, marking the firm’s first foray into stock markets beyond its homeland. This IPO also represents a milestone as the first public listing for an automobile manufacturer in India since Maruti Suzuki’s debut in 2003. “India is one of the most exhilarating automotive markets globally… This IPO will ensure that Hyundai Motor India is even more dedicated to succeed in India,” Kim stated during a press briefing in Mumbai.
The upcoming IPO, anticipated to be the second largest worldwide in 2024, coincides with record highs in Indian stock markets, although it arrives at a time when growth in car sales has been slowing. Sales for new SUVs remain stable, but hatchbacks and small cars—accounting for about 30% of annual sales—are experiencing a decline due to inflationary pressures affecting middle-income consumers.
Hyundai currently holds the position of India’s second-largest car manufacturer, commanding around a 15% share of the passenger vehicle market. However, it faces stiff competition from local rivals such as Tata and Mahindra & Mahindra, who are rapidly gaining market share with their popular new SUV models.