Hyundai is expected to file papers for the listing with the stock market regulator as early as Friday, the sources said. Once approved by the regulator, Hyundai can list in Mumbai.
Hyundai Motor India Ltd, India's second-biggest carmaker behind Maruti Suzuki, will not issue new shares in the IPO which will involve its South Korean parent selling part of its stake in the wholly owned unit to retail and other investors via a so-called "offer for sale" route, the sources said.
Hyundai Motor India declined to comment.
The issue will be Hyundai's first such listing outside South Korea, with the sources saying the company aimed to raise between USD 2.5 billion and USD 3 billion from the stake sale in the offer.
Hyundai is seeking approval to sell an up to 17.5% stake in the IPO to investors, but the final percentage could be lower, the sources said.
Sources previously estimated Hyundai's India unit to be valued at up to USD 30 billion.
The India IPO is aimed at accelerating Hyundai's expansion in a country where it has operated for over 25 years and where its affordable cars like Santro and sports-utility vehicle Creta are popular with Indian buyers.
The listing will reduce Hyundai Motor India's dependence on its Korean parent for funds, giving it the financial muscle to take on local rivals such as Tata Motors and chart its own growth plans in a market that accounts for 14% of Hyundai's total global sales.
The company has plans to sell locally made electric vehicles in India, as well as set up a charging network and a battery facility. It also plans to expand its manufacturing capacity in the country, Reuters has previously reported.
In its planned filing with the Securities and Exchange Board of India (SEBI), Hyundai was required to list "risk factors" for investors in the IPO and cited its dependence on its Korean parent as well as related party transactions within the Hyundai Group, the sources said.
Hyundai also said that unavailability or reduction of incentives from the Indian government, currently available to EV makers, could be a potential risk, the sources said.
Hyundai plans to issue up to 142 million shares in the IPO, out of a total 800 million outstanding shares, the sources said.
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