Hyundai Motor shares hit record high as investors bet on India IPO plan

Hyundai Motor Co’s shares hit a record high as investors bet on the South Korean automaker’s plan to list its India unit in Mumbai, which would help the company boost its presence in the world’s third biggest auto market.

Shares of Hyundai Motor rose as much as 6.3 per cent on Monday to 285,000 won ($206.47), and closed up 3.9 per cent , a record high that lifted its market capitalisation to 58.3 trillion won.

The benchmark KOSPI closed 0.5 per cent lower.

Hyundai Motor’s India unit last week sought regulatory approval for its listing in Mumbai.

The South Korean parent will sell up to 142 million of the total 812 million shares, or 17.5%, in the IPO. The sources have said the final percentage could be lower.

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“Investors are betting on Hyundai Motor’s growth in the Indian market, one of Hyundai Motor’s four biggest revenue-generating markets along with the US, South Korea and Western Europe,” said analyst Song Sun-jae with Hana Securities.

“With the IPO, Hyundai Motor could better accelerate its plans for the Indian market, such as getting dibs on the electric vehicle (EV) market ahead of their competitors by producing EVs in the country by adjusting its existing production site,” Song added.

The draft prospectus filed gave no details of the pricing of the IPO or the company’s valuation, but sources told Reuters that Hyundai aims to raise around $2.5-$3 billion at a valuation of up to $30 billion.

Hyundai will not issue new shares in the IPO, will involve its South Korean parent selling part of its stake in the wholly owned unit to retail and other investors via a so-called “offer for sale” route.

($1 = 1,380.3300 won)

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