Hyundai India IPO: Offering Likely To Launch On Oct. 14-15

Hyundai Motor India Pvt. Ltd. is likely to launch the country’s largest initial public offering as early as Oct. 14, according to people familiar with the matter.

The price band for the $3-billion offering is likely to be announced next week, and the IPO would be launched on Oct. 14–15, the people cited above said, requesting anonymity due to the confidential nature of the information. When contacted, a Hyundai India spokesperson refused to comment on the matter.

The Hyundai India IPO, potentially the country’s largest ahead of Life Insurance Corporation of India’s a few years ago, is a pure offer-for-sale by the company’s South Korean parent.

On offer in the Hyundai India IPO are 14.2 crore shares, equivalent to 17.5% stake, of face value Rs 10 each, according to the draft red-herring prospectus filed with the markets regulator in June this year.

India’s markets regulator—the Securities and Exchange Board of India—approved the draft red-herring prospectus last week with observations. A red herring prospectus is likely to be released next week.

Hyundai Motor Co., which entered the subcontinent with its best-selling Santro in 1998, is the second-largest carmaker today with 15% market share. It’s the only foreign player surviving in a hyper-competitive market dominated by Maruti Suzuki India Ltd. American carmakers Ford Motor Co. and General Motors Co. bowed out after years of attempting to carve out a piece of the world’s third-largest auto market.

A Hyundai India IPO would make the South Korean automaker the first carmaker to list in India since Maruti Udyog Ltd. in 2003. A successful listing will also peg Hyundai India’s market capitalisation at half of its parent’s $47 billion valuation in Seoul.

Nearly one in four Hyundai cars is sold in India now. The company has been consistently clocking 60,000 units per month for some time now, except the last few months as the industry faces slowdown.