Hyundai Motor wants to raise $3 billion by selling shares to the public in India. This move will help Hyundai achieve two things at once: grow in one of the world’s fastest-growing markets and deal with the “Korea discount,” which lowers the value of its business in South Korea.
Hyundai, the second-largest carmaker in India with 15% of the market, is raising money. This could make its Indian business worth up to $30 billion, over half of its total value in Seoul, which is $42 billion. On Monday, the company’s shares jumped 5% to their highest level in almost three years.
Hyundai plans to launch an IPO in India to speed up its growth in a market it’s been in for over 25 years. Analysts and insiders familiar with Hyundai’s plans say they want to tap into India’s market, where their affordable cars are popular among budget-conscious consumers.
If Hyundai’s India unit gets valued at $30 billion, it would be slightly behind competitors like Tata Motors, valued at $41.43 billion, and Maruti Suzuki India, valued at $40.11 billion.
Hyundai, India’s second-largest car seller, is now focusing more on India and the United States. They’ve reduced operations in China due to years of losses and left Russia after selling their two plants there.
They’ve been in India for over 20 years and are a big player alongside Maruti Suzuki. While companies like Ford and General Motors have left India, Hyundai has stayed strong.
Their share of the Indian market peaked at almost 20% because of their variety of small cars and understanding of customer needs. However, they’re facing tough competition from local brands like Tata Motors, which has introduced many new SUVs and electric cars.
Currently, Hyundai holds about 15% of the Indian car market, selling 567,000 vehicles last fiscal year.
Hyundai’s plans for an IPO in India coincide with Tesla’s entry into the Indian market. Going public might help Hyundai compete better with Tesla in the Indian electric vehicle market in the future.
Hyundai aims to invest around $4 billion in India over the next decade to introduce new electric vehicles, set up charging stations, and start a battery pack assembly unit. They’re also investing in a former GM plant to expand production.
Hyundai’s cars are made in Chennai, often called the Detroit of Asia.
(1 US dollar equals 83.0210 Indian rupees)