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HYUNDAI Motor’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 Hyundai Motor 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 (Jun 17) to 285,000 won (S$280), and closed up 3.9 per cent, a record-high close which 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 a listing in Mumbai, which could be the nation’s biggest and will see the South Korean parent sell a stake of up to 17.5 per cent in the company.
“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 United States, South Korea and Western Europe,” said analyst Song Sun-jae with Hana Securities.
“With the India IPO (initial public offering), Hyundai Motor could better accelerate its plans for the India market, such as getting dibs on the electric vehicle (EV) market there ahead of their competitors by producing EVs in the country by adjusting its existing production site,” Song added.
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The Hyundai draft prospectus filed gave no details of the pricing of the IPO or the company’s valuation, but sources said that Hyundai aims to raise around US$2.5 to US$3 billion at a valuation of up to US$30 billion.
Hyundai, India’s second-biggest car maker behind Maruti Suzuki, will not issue new shares in the IPO which 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.
The South Korean parent will sell up to 142 million of the total 812 million shares, or 17.5 per cent, in the IPO. The sources have said the final percentage could be lower. REUTERS
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