Plans for what may be one of India’s largest-ever initial public offerings (IPOs) boosted shares in Hyundai Motor Co, putting them on course for a record high.

Hyundai - which will collect all of the proceeds from the IPO of its local unit - saw its stock jump as much as 6.3% in Seoul on Monday. The South Korean automaker is selling a 17.5% stake in Hyundai Motor India Ltd, according to a draft red herring prospectus filed last Friday.

The maker of the Genesis sedan is seeking to raise about US$2.5 billion in the IPO, with a potential listing planned by year end, Bloomberg News reported last week, citing people familiar with the matter. That would rival the 2022 listing of Life Insurance Corp of India for the nation’s largest IPO on record.

Hyundai has been locked in competition with rivals including Maruti Suzuki India Ltd and Mahindra & Mahindra Ltd, as India’s car demand shifts towards sport utility vehicles and electric models. Shares in Maruti’s parent Suzuki Motor Corp fell as much as 5.1% in Tokyo.

Meanwhile, Hyundai’s suppliers and subsidiaries climbed. SL Corp jumped as much as 14%, while HL Mando Co gained 5.2%, and Kia Corp rose 4.6%.

The IPO sends “a clear message that Hyundai Motor’s investment in India will increase”, said Shin Yoonchul, an analyst at Kiwoom Securities Co. “While investors had expected higher investments in North America and Europe, they had not expected a big output increase in India. Investors are searching for the companies that have entered India, and will see high growth in orders.”

  - Bloomberg