Hyundai India proposed IPO could open floodgates for many more MNCs to list in India
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Hyundai India, which was established nearly three decades ago, recently announced its listing plans in India.
Foreign brokerage, Jefferies said this announcement could open floodgates for many more multinational companies that are operating in India with a significant market share but are still unlisted in the Indian markets.
Some of the global MNCs listed in India have enjoyed market cap growth much faster than their Global Listed companies driven by higher sustainable multiples these companies enjoy in India which is not available in their home countries. Recently BAT (its stake in ITC), Whirlpool and Hyundai have announced monetisation of their stakes in Indian companies. These examples may lead to more MNC companies operating in India to list/monetise their Indian assets, the report said.
If larger global companies like Amazon, Samsung, Apple, Toyota etc. were to think on these lines -- it can be a game changer for Indian equity capital markets.
MNC’s have started using the Indian markets as a funding source. For example - Recently Hyundai India showed its interest to list in India to raise $3 billion which would be India’s biggest IPO at a valuation of up to USD 30 billion, which is more than half its market cap of $42bn in Seoul. Similarly, Whirlpool corporation announced its plans to sell upto 24 per cent stake in in Indian arm, the proceeds of which will be used for debt repayment at the global unit, the report said.
IPOs of the large start-up base can drive attractive investor opportunities Indian Internet economy gave birth to over 100 unicorns over the last decade, making it the third largest unicorn hub only behind US and China. These unicorns operate across diverse industries including SAAS, e-commerce, fintech, gaming, edtech, D2C, logistics, mobility, Web3, healthtech etc. Together they have raised a cumulative funding of USD 100 billion and command a valuation of more than USD 350 billion, the report said.
India's unicorn birth rate has been much higher than other countries. While India saw a 5x growth in the number of unicorns over CY18-22, China and US saw a lower 2-3x growth. These large unicorns brings immense listing potential over the next 5-7 years. While some unicorns such as Flipkart, Swiggy, Ola Electric, PhonePe can be listed in the near term, the report said
