Auto giant Hyundai Motor India Ltd has received markets regulator Sebi’s approval to launch its initial public offering (IPO), news agency PTI has reported citing people familiar with the development. Hyundai Motor India is the Indian subsidiary of South Korean automaker Hyundai.
This development marks a significant milestone for the Indian industry, as it is the first automaker’s IPO in over two decades, following Japanese automaker Maruti Suzuki’s listing in 2003.
Hyundai Motor India IPO Size
Hyundai Motor India’s proposed Rs 25,000-crore IPO is entirely an offer-for-sale (OFS) of 142,194,700 equity shares of the face value of Rs 10 each by promoter Hyundai Motor Company, with no fresh issue component, according to the draft red herring prospectus (DRHP) filed in June.
In February this year, reports suggested that Hyundai was looking to raise at least $3 billion through an IPO. It might dilute a 15-20 per cent stake to raise funds in the range of $3.3-5.6 billion.
Hyundai Motor India IPO: Opening Date & Price
According to a Moneycontrol report, this record-breaking IPO is likely to be launched in October. However, the official date will be announced by Hyundai Motor India later.
The price band of the IPO will also be announced later.
Hyundai Motor India IPO: A Complete Offer for Sale
The Hyundai Motor India IPO is completely an offer for sale (OFS). It means the existing promoters are offloading their equity in the market, and no fresh equity will be floated.
The South Korean parent is diluting some of the stake through the OFS route. As the IPO is fully OFS, Hyundai Motor India Ltd, which is the second largest carmaker in India after Maruti Suzuki India, will not receive any proceeds from the IPO.
Hyundai Motor India IPO: More Details
Hyundai Motor India commenced operations in India in 1996 and currently sells 13 models across segments.
In its draft papers, Hyundai Motor India said, “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.”
Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital and Morgan Stanley are the investment banks advising on the transaction and law firm Shardul Amarchand Mangaldas is the company counsel. Cyril Amarchand Mangaldas is the banks’ counsel and Latham and Watkins is acting as the international counsel.
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