South Korean carmaker Hyundai Motor has ruled out any special allocation of shares to Indian workers in its forthcoming mammoth Indian stock market listing, despite employee demands, sources close to the matter said on Friday.
Hundreds of workers at the company's main Indian plant at Sriperumbudur near Chennai demonstrated this week to demand a share allocation in the upcoming record $3 billion listing, photos and video footage seen by Reuters showed.
But Hyundai does not plan to carve out any shares in a separate employee quota, one of the sources said without elaborating, though it has agreed to talks to attempt to address the workers' concerns, according to a letter and sources.
A Hyundai India spokesperson did not respond to a request for comment.
The letter gave no details of when the talks might take place and who might be involved.
India is a crucial growth market for Hyundai where it has invested $5 billion, with commitments to pump in another $4 billion over the next decade. India is the third-largest revenue generator globally for the company.
The United Union of Hyundai Employees in India said in a June 19 letter to local management that it requested it allot shares to employees as part of the flotation.
"Please arrange a meeting to discuss the stock options for the shares. In the meeting, we can discuss and finalise the terms of the issue, how much is the quantity and at what price," the letter seen by Reuters said.
Hyundai's India IPO is a so-called "offer for sale" in which the South Korean parent will sell a stake of up to 17.5% in the Indian operation. There will be no fresh issue of shares.
According to IPO rules in India, in the case of an offer for sale the company can only create a separate quota for employees to buy shares, as it does for retail and institutional investors, but cannot offer the stock at a discounted price.
Hyundai's IPO offer documents do not have any employee quotas. The company has decided not to create a separate quota because about 35% of the total shares in the IPO will be for retail investors and workers can bid for those, said the source with knowledge of Hyundai's thinking.
