Hyundai Motors India (HMI) went public on the Indian stock market on Oct. 22. Hyundai Motor Company, HMI’s parent company, is set to raise 4.5 trillion won ($3.3 billion) through this initial public offering (IPO), the largest in Indian stock market history. Instead of issuing new shares, Hyundai will sell 17.5% of its total stake.
Hyundai plans to develop India into a global manufacturing base for exports to Europe and Southeast Asia as it shifts its focus away from Russia and China.
“India is a market with endless potential,” said Hyundai Motor Group Chairman Chung Eui-sun during the listing ceremony at the National Stock Exchange (NSE) in Mumbai on Oct. 22. “Our efforts to pioneer future technologies will continue in India.”
Through this IPO, Hyundai aims to increase its market share in India’s booming automotive market and expand investments in research and development (R&D), particularly in electric vehicles and software.
The IPO was priced at 1960 rupees per share (around $32). Foreign and institutional investors such as BlackRock, Fidelity, and the Singaporean government were among those lining up to invest. HMI’s listing is the first by a foreign automaker in India since Maruti Suzuki’s in 2003. The IPO is the largest in Indian stock market history, surpassing the size of previous record IPOs, including the Insurance Corporation of India (211 billion rupees) in 2022 and Paytm (183 billion rupees) in 2021.
Hyundai Motor CEO Chang Jae-hoon said the company plans to leverage India’s rapidly growing capital market to support the growth of its Indian subsidiary.
Hyundai first entered the Indian market in 1996, investing $260 million to build a plant in Chennai. In 1998, it launched the Hyundai Santro, a model based on the small city car Atos, to appeal to local consumers. The company’s market share, which stood at 2% in its first year, rose to 14% by 2000.
In 2008, Hyundai completed construction of a second plant, and in 2015, it launched the Hyundai Creta, a city SUV, sparking an SUV boom in the Indian automotive market. According to Forbes India, 15,902 units of the Creta were sold in India last month, a 25% year-on-year increase, making it the best-selling SUV in the country and one of the top three best-selling models. Hyundai is also a leader in India’s electric vehicle market, launching the Kona EV in 2019, followed by the Ioniq 5 last year.
Analysts predict that Hyundai will use the funds raised through the IPO to compete more aggressively with India’s top automaker, Maruti Suzuki. Hyundai has announced plans to invest in EVs, hydrogen fuel cells, software, and talent, with a focus on small, affordable cars that appeal to younger consumers.
“On the back of a rapidly growing Indian domestic market and a solid export strategy, Hyundai could manufacture and sell over 1 million units annually,” said Koh Taebong, head of research at iM Securities.
Hyundai plans to strengthen India’s role as a global export hub. Last year, Hyundai produced 750,000 vehicles in India, exporting 20%, or 150,000 units, to markets in Africa, Europe, and Southeast Asia. India is Hyundai’s second-largest production and export base, following South Korea. With three newly acquired plants from GM set to begin operations next year, Hyundai’s production capacity is expected to grow steadily, reaching 1.1 million units annually by 2028.
However, shares of Hyundai Motor India dropped nearly 6% in their market debut after its record $3.3 billion IPO. Analysts point to pricing concerns that led to a lackluster response from retail investors, who were concerned they would be unable to make gains on the listing. The company’s IPO, primarily led by institutional investors, was oversubscribed by more than two times, according to Reuters.
