Hyundai India IPO: Price Band Set At Rs 1,865-1,960 Per Share

Hyundai Motor India Ltd. has priced its initial public offering, which is to be India's largest in history when it opens next week.

The Hyundai India IPO, a pure offer-for-sale, will see the South Korean parent company offload 14.2 crore shares in a price band of Rs 1,865-1,960 apiece to raise up to Rs 27,870 crore ($3.3 billion), according to a notification in the newspapers on Wednesday. Bids can be made in the lot size of seven shares or multiples thereof.

At the upper end of the Hyundai IPO price band, the company will be valued at nearly Rs 1.6 lakh crore, or about half of the market capitalisation of the Seoul-listed parent.

The price-to-earnings ratio, based on the diluted earnings-per-share ratio in Fiscal 2024, is as high as 26.28 times at the upper end of the price band and 25.01 times at the lower end. That compares with the industry average of 23.57 times in the same financial year.

The three-day Hyundai IPO subscription will open for bids on Oct. 15, with a listing expected on Oct. 22, according to the company’s red-herring prospectus issued on Tuesday.

Advisers for the share sale include Kotak Mahindra Bank Ltd., Citigroup Inc., HSBC Holdings Plc, JPMorgan Chase & Co., and Morgan Stanley.

The listing of Hyundai Motor India IPO is set to break the record set by Life Insurance Corp. of India, which raised $2.7 billion in 2022. This will also be one of Asia’s biggest IPOs in recent years.

Hyundai Motor Co., which entered India with the Santro in 1998, is currently the second-largest carmaker in the country with a 15% market share. It remains the only foreign carmaker in a competitive market led by Maruti Suzuki India Ltd., after Ford Motor Co. and General Motors Co. exited the Indian auto market.

A successful Hyundai stock offering will make the South Korean automaker the first to list in India since Maruti Udyog Ltd. in 2003. Hyundai India shares will be valued at nearly half of its parent company’s $47 billion market capitalisation in Seoul.

International research firm Nomura previously said that Hyundai India market valuation deserves a premium over Maruti Suzuki India Ltd., considering the current market conditions, particularly Maruti's declining market share.

Nearly one in four Hyundai cars is now sold in India. The company has consistently recorded sales of 60,000 units per month, except for recent months due to the slowdown in the industry.