(Bloomberg) -- Hyundai Motor Co. is considering an initial public offering for its India unit that may raise about $2.5 billion, according to people familiar with the matter, potentially making it one of the biggest listings ever in the South Asian country. 

Hyundai has held talks with international banks about the possible IPO, the people said, asking not to be identified discussing confidential information. The company may reach out to domestic advisers for pitches soon, one of the people said. A listing may value the Indian unit at $25 billion, the people said.

Considerations are at a very early stage and a share sale may not go ahead, the people said. 

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A representative for Hyundai Motor India Ltd. declined to comment and the parent company didn’t immediately respond to requests for comment.  

If an IPO does proceed, Hyundai will use the cash raised to expand operations, one of the people said. India is a key market that accounted for 13 per cent of Hyundai’s global sales last year and the South Korean firm is the country’s second-biggest carmaker. 

Shares of Hyundai’s component suppliers in India rallied Tuesday following news of the possible IPO, first reported by the Economic Times, which said the company was exploring raising $3.3 billion to $5.6 billion. 

About $27 billion was raised in IPOs and follow-on share sales in India last year, exceeding Hong Kong for the first time in at least three decades, according to data compiled by Bloomberg. India’s benchmark Sensex index has risen for the past eight years in a row, including a 19 per cent advance in 2023. 

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