Hyundai plans EV offensive in India with IPO proceeds, seeks higher valuation

Hyundai is planning to launch India IPO worth $3 billion in valuation, which could be the country's biggest ever, and the carmaker's first such listin
Hyundai Ioniq 5
Hyundai is planning to use earnings from its upcoming India IPO to launch more electric cars and set up EV charging infrastructure in the country. The Korean auto giant currently offers two electric vehicles - the Ioniq 5 and Kona Electric SUVs.
Hyundai Ioniq 5
Hyundai is planning to use earnings from its upcoming India IPO to launch more electric cars and set up EV charging infrastructure in the country. The Korean auto giant currently offers two electric vehicles - the Ioniq 5 and Kona Electric SUVs.

Hyundai Motor's planned $3 billion IPO in India will help the carmaker score two goals in one go: expand in one of the world's fastest growing markets and tackle the so-called "Korea discount" that suppresses the value of its business back home.

Hyundai, India's second-biggest carmaker behind Maruti Suzuki with a 15% market share, has appointed bankers for the initial public offering which could be the country's biggest ever, and Hyundai's first such listing outside South Korea.

Also check these Cars

Find more Cars
Hyundai Ioniq 5 (HT Auto photo)
BatteryCapacity Icon72.6 kWh Range Icon631 Km
₹ 44.95 Lakhs
View Offers
Skoda Enyaq (HT Auto photo)
BatteryCapacity Icon77 kwh Range Icon510 km
₹ 50 - 55 Lakhs
View Details
Mg 4 Ev (HT Auto photo)
BatteryCapacity Icon64kWh Range Icon350 km
₹ 30 - 32 Lakhs
View Details
Tata Sierra Ev (HT Auto photo)
BatteryCapacity Icon69 kWh Range Icon420 Km
₹ 25 - 30 Lakhs
View Details
Tata Harrier Ev (HT Auto photo)
BatteryCapacity Icon50 kWh Range Icon400 Km
₹ 22 - 25 Lakhs
View Details
Hyundai Creta (HT Auto photo)
Engine Icon1497 cc FuelType IconMultiple
₹ 11 - 20.15 Lakhs
View Offers

The India IPO is aimed at accelerating its expansion in a country where it has operated for over 25 years and where its affordable cars are popular with price-conscious Indians, according to analysts and four people familiar with the carmaker's plans.

The listing will also reduce Hyundai's dependence on its parent for funds, giving it the financial muscle to take on local rivals such as Tata and chart its own growth plans in a market that accounts for 14% of total global sales, the sources said.

"India will become the ground to raise money for local projects.Hyundai understands the market dynamics," said Gaurav Vangaal of S&P Global Mobility.

Hyundai plans to use the IPO proceeds largely to fund the launch of EVs in India, as well as set up a charging network and a battery facility, the sources said. The money will also be used to expand its manufacturing capacity in the country.

India is a "sizable" market for Hyundai, and more capital raised locally will help it build EV infrastructure there, said Kevin Yoo an analyst at Daol Investment & Securities.

A spokesperson for Hyundai declined to confirm the IPO plans, reiterating an earlier statement that said the company "constantly reviews various activities, including listing of overseas subsidiaries, to increase corporate value".

The IPO plans come as India's stock markets are soaring. The benchmark Indian indices have doubled between 2019 and 2023, while Seoul's KOSPI index has risen just 30% in the same period.

Also Read : Skoda Enyaq is all set to be launched on February 27. Check details

Two of the sources said Hyundai wants to cash in on this growth and also tackle the "Korea discount", a term analysts use to refer to the typically lower valuations for South Korean companies compared to global peers because of lower dividend payouts, the dominance of opaque conglomerates and geopolitical risks involving North Korea.

Hyundai is considering a valuation of $30 billion for the India unit IPO, the sources said, which is more than half of its Korea-listed parent which trades in Seoul at a market capitalisation of $46 billion. A rich valuation for India could boost valuations at home, one of the sources added.

Jonathan Pines, lead portfolio manager for Asia ex-Japan at Federated Hermes Limited, in a report last year on the "Korea Discount" phenomenon, said about one in three South Korean stocks trade below a price-to-book multiple of one, which means a company's market cap is below the value of its net assets.

Also Read : Why prices of electric cars in India are going down

Hyundai trades at a price-to-book ratio of 0.69 in Seoul. Indian automakers Tata Motors trades at 6.48 and Maruti Suzuki at 4.96.

Some analysts, however, say fixing the "Korea discount" problem will not be so easy.

"I don't believe this is something that can be resolved simply by seeking to be listed elsewhere – although that can help fundraising and elevate their local brand image to some extent," said Lee Jung-bin, an analyst at Shinhan Securities.

"Having said that it could potentially unlock better valuation than the parent company in Korea as investors could focus more on local performance there," Lee added.

First Published Date: 15 Feb 2024, 08:38 AM IST

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy
Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.