Hyundai Announces Major IPO Plans, Aiming to Raise INR 25,000 Crores

Hyundai Motor India, the India-based automotive firm with a parent company based in South Korea, announced an initial public offering (IPO) in 2024 with the aim of raising approximately INR25,000 crore, making it the largest public offering.

The IPO would include a new share sale of approx. INR10,000 Crores along with an offer for sale of up to 142,194,700 equity shares of INR10 each by the promoter, previously reported by SFC Today. The offering will contribute 17% of the total sales value of the company, resulting in significant annual revenue generation. Subscriptions to the IPO will be available in 2024 and close at some point in 2024. It will be available for subscription in three categories:

• Qualified Institutional Buyers (QIBs): 50%
• Non-Institutional Investors (NIIs): 15%
• Retail Individual Investors (RIIs): 35%

Note: The new shares sales will be updated soon.

Company Overview

Hyundai Motor India Limited is the largest original equipment manufacturer (OEM) based on passenger vehicle sales in 2023, according to the CRISIL Report. Since fiscal year 2009, the company has maintained its position as the second-largest auto OEM in the Indian passenger vehicle market by domestic sales volume.

The company makes crucial parts like transmissions and engines and has been the largest exporter of passenger vehicles for India from FY 2005 to 2024, holding the record for maximum exports in this period and offering a diverse portfolio that includes SUVs, sedans, electric vehicles (EVs), and others.

Hyundai has sold nearly 12 million passenger vehicles, both domestically and internationally, since its establishment in 1998. The company’s success is driven by its diverse portfolio, stakeholder management, brand image, advanced technologies and robust operational efficiency. In 2023, the company contributed to Hyundai Motor Company’s global sales, increasing its share from 15.48% in 2018 to 18.19% in 2023.

Brokerage Firm’s Analysis of Company IPO

The company’s IPO by brokerage firms is currently not available and has yet to provide its evaluations on this IPO based on Capital Market, Religare Broking, Hem Securities, and Arihant Capital.

Note: Updates will be shared when they are officially released.

Details on Hyundai Motor India IPO Date and Price Band

The firm IPO is expected to open and close in 2024, with the aim of raising approximately INR25,000 Crores, with a fresh issue of approximately INR10,000 Crores and an offer for sale of up to 142,194,700 equity shares of INR10 each by the promoter of the company.

The equity shares of the firm will be listed on the BSE and NSE, India-based stock exchanges, in three categories: Retail Individual Investors (RIIs): 35%; Qualified Institutional Buyers (QIBs): 50%; and Non-Institutional Investors (NIIs): 15%.

IPO Objective

Hyundai Motor India Limited intends to utilize the proceeds from the fresh issue to fund its growth plans, which include investments in electric vehicles (EVs), charging infrastructure, battery pack assembly units, and capacity expansion. The IPO will also provide the company with greater financial flexibility and enable it to diversify its shareholder base.

Market lot Information on Hyundai Motor India IPO

The lot size and corresponding amounts are as follows:

• Retail Minimum: 1 lot (NA shares) for INR[NA]
• Retail Maximum: 13 lots (NA shares) for INR[NA]
• S-HNI Minimum: 14 lots (NA shares) for INR[NA]
• B-HNI Minimum: 68 lots (NA shares) for INR[NA]

Note: Information Not Available (NA) – To be Updated Soon.

Allotment Dates for Hyundai Motor India IPO

The company is planning to open and close its IPO in 2024. The remaining shares from the IPO will be determined in 2024, and the shares are expected to be floated in the stock markets in 2024.

Application Process of IPO

The IPO can be accessed by submitting an application through the online ASBA (Application Supported by Blocked Amount) facility from the bank through ‘Internet banking’, going to ‘Invest’, and applying for the Hyundai Motor India IPO. On the other hand, the IPO forms are also available for download on the NSE and BSE websites which the candidates can fill and submit.

Financial Analysis of Company

The company has demonstrated good financial performance over the past few years in terms of revenue, expenses, and profit after tax (PAT).

The total revenue of the company in 2021 was INR41,404 Crores, with expenses of INR38,864 Crores, which led to a PAT of INR1,881 Crores. In 2022, the total revenue reached INR47,966 Crores, with expenses of INR44,193 Crores and a PAT of INR2,901, demonstrating a significant increase in revenue.

Furthermore, the company recorded revenue of INR61,436 in 2023, with expenses of INR55,091 crore and a PAT of INR4,709 crore. Simultaneously, the company’s revenues were INR53,298 Crores, expenses were INR47,317 Crores, and the PAT was INR4,382 Crores in December 2023.

In conclusion, the company has experienced a steady increase in its revenues as well as better operating margins that depict its sound operational performance in the automobile market in India.

IPO Valuation

Based on the information disclosed in the IPO filing, Hyundai Motor India Limited earned an Earnings Per Share (EPS) of INR57. 96 for the period under consideration. The Return on Net Worth (RoNW) ratio was high at 23.48% meaning most of the shareholder funds are well utilized and Net Asset Value (NAV) per equity share was recorded at INR246.82.

Competitor Analysis

• Tata Motors Limited

Tata Motors Ltd. is an automotive firm founded in 1945 and based in India. The firm is part of the Tata Group. It manages cars, buses, trucks, defense vehicles, and utility vehicles, has a strong market both in the domestic and export markets, and is present in more than 175 countries.

• Mahindra & Mahindra Limited

Mahindra & Mahindra Limited is an automobile manufacturing company based in India that was founded in 1945 as a parent organization of Mahindra Group. They mostly deal with products for commercial use as well as agriculture machinery comprising tractors, and serve more than 100 countries. It is dedicated to providing products with high durability and highly developed.

• Maruti Suzuki India Limited

Maruti Suzuki India Limited is the largest vehicle manufacturing company in India, and it is owned by Suzuki Motor Corporation. The firm is also keen on building cheap, durable, and energy-efficient cars. Its product range embraces hatchbacks, sedans, SUVs/MUVs, and MPVs. The company offers its customers vehicles of diverse classes and committed to promoting innovations in the auto industry in the areas of technology and environmental sustainability for environmentally friendly mobility solutions.

List of IPO Investors

The lead managers, also known as merchant bankers, for the Hyundai Motor India IPO include Kotak Mahindra, Citigroup Global Markets, HSBC Securities and Capital Markets, J.P. Morgan and Morgan Stanley India Company Private Limited.

These firms are responsible for managing the IPO process, ensuring regulatory compliance, and facilitating the sale of shares to investors, positioning Hyundai Motor India for a successful public offering.

Hyundai Motor India’s Initial Public Offering marks a significant milestone in the company’s illustrious journey within the Indian automotive market. As the largest OEM in passenger vehicle sales as of 2023, Hyundai’s decision to go public with an ambitious IPO target of INR 25,000 crores reflects both its confidence in the Indian market and its commitment to furthering innovation, particularly in the electric vehicles (EVs) sector and other advanced automotive technologies.

This IPO not only aims to secure the necessary capital to enhance Hyundai’s infrastructure and expand its offerings but also to fortify its position against formidable competitors such as Tata Motors, Mahindra & Mahindra, and Maruti Suzuki. By leveraging the proceeds for expansion into electric vehicles and enhancing existing manufacturing capabilities, Hyundai is poised to remain at the forefront of India’s rapidly evolving automotive landscape.