Hyundai Motor is one step closer to making a successful debut on the Indian stock market, as the South Korean auto giant’s Indian subsidiary Hyundai Motor India Limited has obtained approval for its highly-anticipated initial public offering from Indian regulators.

According to industry sources and local media outlets in India on Wednesday, the Securities and Exchange Board of India recently cleared Hyundai Motor’s paperwork for the IPO.

In June this year, Hyundai Motor India submitted its draft red herring prospectus, or DRHP, as the company set eyes on a valuation between $18 billion and $20 billion.

“The objects of the offer are to carry out the offer for sale of up to 142,194,700 equity shares of the face value of Rs 10 ($0.12) each by the promoter selling shareholder and to achieve the benefits of listing the equity shares on the stock exchanges,” the DRHP stated.

“Further, our company expects that listing of the equity shares will enhance our visibility and brand image and provide liquidity and a public market for the equity shares in India."

More information about the IPO, such as the pricing and timeline, is expected to be released soon as market observers forecast that the IPO will likely take place in October.

As Hyundai Motor’s IPO has drawn high anticipation from the market, major financial institutions have been reportedly involved in the process, including Citi, HSBC Securities, JP Morgan and Morgan Stanley.

The Korean automaker’s Indian listing, valued at approximately $3 billion, will set a new record for the biggest IPO ever in India if the listing plans follow through the rest of the process. The previous record was set in May 2022 when the state-owned Life Insurance Corporation of India raised about $2.7 billion.

Hyundai Motor is also on pace to become the first automaker to go public in India in the past two decades after Japan’s Maruti Suzuki India Limited went public there in 2003. Maruti Suzuki India is the biggest automaker in the country, accounting for about 42 percent market share. The Japanese brand’s market capitalization was estimated at $48 billion after the Indian trading hours closed Tuesday.

A Hyundai Motor official in Seoul said the company could not confirm the SEBI’s approval.

According to Autopunditz, a website for automobile data analysis and statistics in India, Hyundai Motor was the second biggest auto brand in India in the first half of this year. The Korean brand sold 309,772 units, taking up 14.3 percent of the market during the period behind Maruti Suzuki’s sales volume of 898,905 units. Kia, Hyundai Motor’s sister affiliate under Hyundai Motor Group, sold 126,137 units there from January to June this year.

According to Hyundai Motor’s DRHP, the Korean automaker has been the second-largest automaker in India’s domestic passenger vehicle market since 2009.

The DRHP stated that the automaker had been India’s largest exporter of passenger vehicles from the fiscal year 2005 to the first 11 months of the fiscal year 2024, citing the CRISIL report. The company said it has sold almost 12 million passenger cars in India and through exports since 1998 when its Indian plant began production.

Experts said the IPO would expand Hyundai Motor’s presence in India and bolster its image among the Indian public.

“(Hyundai Motor’s) Indian IPO has a very important meaning because India is rising as the next manufacturing plant of the world instead of China,” said Kim Pil-su, an automotive engineering professor at Daelim University.

“The automotive market in India is exponentially growing and has a high potential for growth. The reason Hyundai Motor is going for listing there is to emphasize (its vehicles) are ‘made in India’ as the country and public take pride in that. (Hyundai Motor) already has a good reputation and the IPO will only add more to its increasing brand value.”

Hyundai currently offers 14 models in India, ranging from sedans and sport utility vehicles to hatchbacks. The Korean automaker plans to roll out six more models through next year including the Ioniq 6 and Creta EV. Under the company’s ongoing projects to expand production capacity at its Indian footholds, Hyundai Motor Group is projected to have an annual capacity to manufacture 1.5 million vehicles by the second half of next year.