Hyundai Motor Company is looking to file for an initial public offering (IPO) of its wholly-owned Indian subsidiary, Hyundai Motor India Ltd, in the next two months – according to local reports.

South Korea’s leading automaker is understood to be looking to raise up to US$3bn from the IPO, which would make it the largest in the country to-date, to help fund capacity expansion and the company’s transition to zero-emission vehicles in the world’s third-largest vehicle market (after only China and the US).

Reports says Hyundai also plans to strengthen India’s role as a global production hub, particularly for budget vehicles.

Hyundai Motor India is understood to have added investment banks Morgan Stanley and Kotak Mahindra Bank to its list of advisors for its planned IPO, joining Citigroup Global Markets, HSBC Securities and JP Morgan to help speed up its stock market debut.

This follows reports in the UK that the company plans to file a draft red herring prospectus (DRHP), a preliminary IPO registration document, with the Securities and Exchange Board of India in the next two months.

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Hyundai Motor group’s chairman and CEO Chung Euisun visited the company’s Indian operations in April, where he outlined the company’s medium and long-term strategies. Talk of the IPO has gained momentum since this visit, despite the company maintaining publicly that a decision has not yet been made.

Hyundai is India’s third-largest automaker in India after Maruti Suzuki and Tata Motors, with local sales reaching 602,000 units last year – with the Creta small SUV and i10 and i20-based small cars its best-selling models. The company exported a further 164,000 vehicles, with total output amounting to 766,000 units.