Sebi Approves Hyundai Motor India's Rs 25,000-cr IPO, Swiggy's Rs 10,000-cr IPO

Hyundai Motor India Ltd, the Indian arm of South Korean automaker Hyundai, and food and grocery delivery major Swiggy have received capital markets regulator Sebi's approval to float initial public offerings (IPOs), people familiar with the development said on Wednesday.

Sources had previously stated that the South Korean automaker is looking to raise at least USD 3 billion (about Rs 25,000 crore) through an initial share sale, while the IPO of Swiggy has been pegged at over Rs 10,000 crore. Hyundai Motor India's IPO, if it goes through, would be the largest in India, surpassing LIC's share sale of Rs 21,000 crore. The country's IPO market is thriving, with around 60 main board companies having launched their initial share sales this year so far.

According to the Draft Red Herring Prospectus (DRHP) filed in June, Hyundai Motor India's proposed IPO is entirely an Offer-for-Sale (OFS) of 142,194,700 equity shares by promoter Hyundai Motor Company, with no fresh issue component. This development marks a significant milestone for the Indian industry, as it is the first automaker's initial share sale in over two decades, following Japanese automaker Maruti Suzuki's listing in 2003.

The South Korean parent is diluting some of the stake through the OFS route. Since the public issue is completely an OFS, Hyundai Motor India Ltd, which is the second largest carmaker in India after Maruti Suzuki India, will not receive any proceeds from the IPO. People familiar with the development said that Hyundai Motor India has received an e-mail from the Securities and Exchange Board of India (Sebi) approving its IPO.

In its draft papers, Hyundai Motor India stated that it expects that the listing of the equity shares "will enhance our visibility and brand image and provide liquidity and a public market for the shares". In February this year, sources confirmed that the South Korean automaker is planning to garner at least USD 3 billion through an IPO. It may dilute a 15-20 per cent stake to raise funds in the range of USD 3.3-5.6 billion.

Hyundai Motor India commenced operations in India in 1996 and currently sells 13 models across segments. Last month, electric two-wheeler company Ola Electric Mobility got listed on the bourses after successful completion of its Rs 6,145-crore initial share sale. With regards to Swiggy, the food delivery major filed its offer document on April 30 through the confidential pre-filing route, keeping details undisclosed for the time being. Under the confidential filing process, Sebi reviews confidential DRHP and provides comments on it.

Thereafter, the company going public is required to file an update to the confidential DRHP (UDRHP-I) after incorporating the regulator's comments. This UPDRHP-I is made available for public comments over 21 days. Finally, after incorporating the changes due to public comments, the company is required to update the DRHP-II (UDRHP-II). Swiggy can launch its IPO once the final prospectus is filed.

In April, sources stated that Swiggy received shareholders' approval for an IPO to raise Rs 10,414 crore fund through the issue of fresh equity shares and an OFS. A special resolution was passed at an extraordinary general meeting of Swiggy on April 23, they stated. According to sources, the Bengaluru-based company plans to raise up to Rs 3,750 crore funds through fresh equity shares, in addition to an OFS component of up to Rs 6,664 crore. The company is looking to shore up about Rs 750 crore from anchor investors in a pre-IPO round, they had added. Founded in 2014, Swiggy had a valuation of nearly USD 13 billion in April.

The company's annual revenue stood at USD 1.09 billion as on March 31, 2023, and has more than 4,700 employees, according to Tracxn, a global startup data platform. Last week, Swiggy announced the launch of a new initiative "Project Next", aimed at providing career growth opportunities for its delivery partners while accelerating restaurant onboarding.