Toyota's India Business Getting Ready For IPO
Toyota Motor Corporation is evaluating an initial public offering (IPO) of its Indian arm, Toyota Kirloskar Motor, with potential fundraising estimated at 700 to 800 million dollars. Multiple discussions at Toyota’s Tokyo headquarters have involved senior executives and investment bankers, showing that the listing option is being seriously examined.
What is being considered
Toyota’s global finance team, including the chief financial officer, has reviewed detailed proposals on how the market could respond, possible valuations, and timing.
The company currently owns 89 percent of Toyota Kirloskar Motor, while the Kirloskar Group holds the remaining 11 percent. Any listing would require decisions on whether both new shares and existing stakes are offered, balancing fundraising with market liquidity.
Strong financial performance
The potential IPO comes after Toyota Kirloskar Motor posted record financial results in FY25. Net profit reached Rs 5,672 crore, up 18.5 percent from the previous year’s Rs 4,787 crore. Operating revenue grew 16.2 percent to Rs 64,895 crore, driven mainly by demand for hybrid models and expanded production capacity.
Profit before tax climbed 23 percent to Rs 6,494 crore. Dividend payouts rose sharply to Rs 3,576 crore, more than five times the previous year. These numbers highlight the company’s ability to generate cash and sustain shareholder returns, factors that matter for prospective investors.
Market position in India
Toyota Kirloskar sells models such as the Innova Crysta, Hyryder, Fortuner, Hilux, Camry, and Glanza. The company holds 7.2 percent of India’s passenger vehicle market and has built leadership in certain categories.
In hybrids, where Toyota has long-standing global expertise, the company controls 81 percent of the market. This strength in hybrids is important as policies begin to favour cleaner vehicle technologies.
After Hyundai, Toyota All Set To Do An IPO
The backdrop for an IPO looks favourable. Hyundai Motor India’s public offering raised nearly Rs 27,870 crore and now has a market value of Rs 2.10 trillion.
That success has set an example for other foreign automakers in India. If Toyota proceeds, it would become the second international carmaker after Hyundai to list locally, adding India to the list of countries where Toyota shares are traded.
The broader passenger vehicle segment grew 4.9 percent in FY 2024-25, powered mainly by utility vehicles. These now make up two-thirds of the market, an area where Toyota has a strong presence through models like the Fortuner and planned new products.
Opportunities and risks
India still has low levels of car ownership compared to developed countries, which leaves room for growth. Rising incomes, better roads, and changing consumer preferences make the market attractive.
Policy changes have also helped. GST cuts for sub-four-metre cars improved affordability, and new rules that favour hybrids could benefit Toyota given its global lead in the technology.
At the same time, challenges remain. Domestic manufacturers are strengthening their SUV portfolios, forcing Toyota to keep investing in product development and local positioning. The gradual move to electric vehicles is another factor. Even though EV adoption is still limited, Toyota will need to allocate significant resources to future technology and capacity.
Where it stands now
Toyota has publicly denied that a listing process is underway, saying it has no such plans. This is not unusual at an early stage, as companies often keep options open while evaluating possibilities. Formal IPO steps have not begun, but the level of detail in banker presentations and involvement of senior leadership suggest that the option is being explored carefully.
For now, the strong financial performance of Toyota Kirloskar Motor, combined with favourable market sentiment and the Hyundai listing precedent, provide the right conditions should Toyota decide to move ahead. Investors will be watching closely to see if the company takes the next step toward the public markets.