Hyundai Motor India Ltd, the Indian arm of South Korean automaker Hyundai, has received capital markets regulator Sebi's approval to float an initial public offering (IPO), people familiar with the development said on Wednesday.

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This development marks a significant milestone for the Indian industry, as it is the first automaker initial share-sale in over two decades, following Japanese automaker Maruti Suzuki's listing in 2003.

Hyundai Motor India's proposed IPO is entirely an Offer-for-Sale (OFS) of 142,194,700 equity shares by promoter Hyundai Motor Company, with no fresh issue component, according to the draft red herring prospectus (DRHP) filed in June.

The South Korean parent is diluting some of the stake through the OFS route.

Since the public issue is completely an OFS, Hyundai Motor India Ltd, which is the second largest carmaker in India after Maruti Suzuki India, will not receive any proceeds from the IPO.

People familiar with the development said that Hyundai Motor India has received an email from the Securities and Exchange Board of India (Sebi) approving its IPO.

In its draft papers, Hyundai Motor India stated that it expects that the listing of the equity shares "will enhance our visibility and brand image and provide liquidity and a public market for the shares".

In February this year, sources had confirmed that the South Korean automaker is looking to raise at least USD 3 billion through an IPO. It may dilute 15-20 per cent stake to raise funds in the range of USD 3.3-5.6 billion, sources had stated.

Hyundai Motor India commenced operations in India in 1996 and currently sells 13 models across segments.

Last month, electric two-wheeler company Ola Electric Mobility got listed on the bourses after successful completion of its Rs 6,145-crore initial share sale.