Hyundai Motor India Ltd. (HMIL) is gearing up for what could become the largest initial public offering (IPO) in India’s history
According to the draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), Hyundai Motor India aims to raise approximately $2.5 billion (Rs 20,800 Crores) to $3 billion (Rs 25,000 Crores) by offering 142.2 million equity shares, which represent 17.5% of its post-offer paid-up equity share capital. This IPO is anticipated to surpass the record set by Life Insurance Corporation of India’s (LIC) $2.7 billion issue in 2022.
Details of the Offering
The proposed IPO is set to make a significant impact on the Indian stock market, potentially valuing Hyundai Motor India at between $25 billion (Rs 2.08 Lakh Crore) and $30 billion (Rs 2.5 Lakh Crore). This valuation underscores the company’s robust performance and strategic market position as India’s second-largest carmaker by passenger sales volume, trailing only Maruti Suzuki. In the fiscal year 2023, Hyundai Motor India reported revenue of Rs 60,000 crore and profits of Rs 4,653 crore, making it the most profitable among non-listed car manufacturers in the country.
Hyundai Motor India plans to allocate 35% of the total equity on offer to retail individual investors, aiming to broaden its shareholder base and enhance market liquidity. This strategic move is designed to leverage the heightened investor interest in one of India’s most prominent automotive brands.
Historical Context and Future Prospects
Hyundai Motor Co., the South Korean parent company, established its first manufacturing plant in India in 1998. Over the years, the company has solidified its presence in the Indian market, now holding a 15% share. Recently, Hyundai announced new investment plans in India worth approximately $3.75 billion, aimed at expanding its production capabilities and enhancing its electric vehicle (EV) offerings.
Strategic Benefits
The DRHP highlights the strategic benefits of the IPO, including increased visibility, enhanced brand image, and the provision of liquidity and a public market for the company’s equity shares in India. These factors are expected to position Hyundai Motor India favourably against growing competition from both domestic players like Tata Motors and international entrants such as Tesla.
As Hyundai Motor India advances towards this monumental IPO, it is poised to not only set a new benchmark in the Indian stock market but also to reinforce its commitment to growth and innovation in one of the world’s fastest-growing automotive markets.
