Hyundai Motor India Files RHP for Record ₹3 Billion IPO Launch

IPO
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Hyundai Motor India Files RHP for Record ₹3 Billion IPO Launch

Hyundai Motor India submitted a Red Herring Prospectus (RHP) to the Registrar of Companies on October 8 and its IPO is set for launch on October 15. The ₹27870 crore Hyundai IPO will consist of 14.2 crore equity shares and the price range is ₹1,865 to ₹1,960 per equity share. It will be available for institutional investors (anchor book) for one day on October 14, who can purchase up to 60% of these shares, and the subscription period will close on October 17.

Additionally, 15% of the shares are reserved for non-institutional investors, while the remaining 35% are for retail investors. Hyundai Motor India has set aside up to 7,78,400 equity shares for its employees.

About Hyundai Motor

Hyundai Motor India is a subsidiary of South Korea’s Hyundai Motor Company and has been the second-largest car manufacturer in the Indian passenger vehicle market since FY09. It is also the second-largest exporter of passenger vehicles in India from April 2021 to June 2024.

Hyundai Motor India has performed well, with a net profit increase of 12.1% year-on-year to ₹1,489.6 crore for the quarter ending June 2024. The company reported an EBITDA (earnings before interest, tax, depreciation, and amortization) of ₹2,340.3 crore for the June quarter, up 17.2%, and the EBITDA margin rose by 148 basis points to 13.5% compared to the same period last year.

In the first quarter of fiscal year 2025, revenue was ₹17,344.2 crore, a 4.3% increase from ₹16,623.5 crore in the same period last year. For fiscal year 2024, net profit rose by 28.7% to ₹6,060 crore, and revenue grew by 15.8% to ₹69,829 crore. EBITDA for FY24 increased by 21% to ₹9,132.6 crore, with the margin rising by 58 basis points to 13.08%.

Largest IPO

The ₹27870 crore Hyundai IPO will be the largest IPO in India, surpassing the previous record of ₹21,000 crore (₹2.7 billion) raised by the Life Insurance Corporation of India in 2022. After the IPO, Hyundai Motor Company will own 82.5% of Hyundai Motor India.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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Hyundai Prepares for October 15 IPO Launch

Hyundai Motor India is preparing to launch its initial public offering (IPO) on October 15, 2024, in what is set to be the largest IPO in Indian market history. Through an offer for sale (OFS) of up to 14.2 crore shares, Hyundai aims to raise between Rs. 26,505 crore and Rs. 27,856 crore, with the share price set between Rs.1,865 and Rs.1,960 per share.

Key Dates & How to Get In

The IPO subscription will be open to institutional investors starting on October 14 while retail investors can bid between October 15 and October 17. Retail investors are required to bid for a minimum of seven shares, bringing the minimum investment to Rs. 13,720. Hyundai’s shares are expected to be listed on the NSE and BSE on October 22, 2024, following the allotment of shares on October 18, 2024.

What’s the IPO About?

This IPO will be executed entirely through the OFS route, where Hyundai’s South Korean parent company will sell up to 17.5% of its stake in the Indian subsidiary. No new shares will be issued as part of the IPO, and the proceeds will be directed to the parent company. As such, the Indian arm of Hyundai will not receive any direct funds for operations or expansion.

Financials

Hyundai Motor India has shown consistent financial growth. For Q1FY25, the company reported a net profit of Rs. 1,489.65 crore and revenues of Rs. 17,567.98 crore. For FY24, the company posted a net profit of Rs.6,060.04 crore on revenues of Rs.71,302.33 crore.

Should You Invest?

The Hyundai IPO offers an opportunity to buy into one of India’s leading automotive companies. It thus presents an opportunity for investors seeking to participate in a large, well-established company. However, potential investors should consider that the proceeds from the IPO will not contribute to Hyundai’s Indian operations. Additionally, while Hyundai is a major player in the Indian market, the company operates in a highly competitive industry, which could present challenges.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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Hyundai Motor India IPO: Key Highlights, Risks, and Market Buzz

Hyundai Motors India IPO will be a complete offer for sale of 14.22 crore shares, each with a face value of ₹10 and the price range is ₹1,865 to ₹1,960 per equity share. The IPO is set for launch on October 15. It will be available for institutional investors (anchor book) for one day on October 14, while retail investors can bid between October 15 and October 17, and the subscription period will close on October 17.

Hyundai aims to raise between Rs. 26,505 crore and Rs. 27,856 crore through this IPO. The shares are expected to be listed on the NSE and BSE on October 22. The lead managers for the IPO are Citigroup Global Markets, Kotak Mahindra Capital, HSBC Securities, J.P. Morgan India, and Morgan Stanley India. Kfin Technologies will act as the registrar.

Key Risks

The rising costs of parts and materials could negatively impact business operations of automobile manufacturing companies. Hyundai Motors also relies on a limited number of suppliers, and any disruption in supply could affect production.

The potential investors should consider that the proceeds from the IPO will not contribute to Hyundai’s Indian operations, rather would be invested in the South Korean parent company.

Hyundai Motor Financials and Peers

For the nine months ending December 31, 2023, Hyundai Motor reported revenues of ₹32,488.34 crore and a net profit of ₹4,382.87 crore, with a profit margin of 13.5%. Hyundai Motor India has shown consistent financial growth. For Q1FY25, the company reported a net profit of Rs. 1,489.65 crore and revenues of Rs. 17,567.98 crore. For FY24, the company posted a net profit of Rs.6,060.04 crore on revenues of Rs.71,302.33 crore. Competitors listed in the DRHP include Maruti Suzuki, Tata Motors, and Mahindra & Mahindra.

About Hyundai Motor

Established in May 1996, Hyundai Motor India is part of the Hyundai Motor Group, the world’s third-largest car manufacturer by passenger vehicle sales. The company produces and sells reliable and innovative cars, along with components like transmissions and engines.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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Hyundai IPO: Competing with Maruti, Tata Motors, and Mahindra on Indian Exchanges

Hyundai Motor India Ltd, the Indian subsidiary of South Korean automaker Hyundai, is launching its highly anticipated IPO on October 15, 2024. It will be the largest IPO in Indian history through which Hyundai aims to raise between Rs. 26,505 crore and Rs. 27,856 crore, with the share price set between Rs. 1,865 and Rs. 1,960 per share.

Hyundai Motor India’s listed peers on the Indian stock exchanges include Maruti Suzuki India Ltd, Tata Motors Limited, and Mahindra & Mahindra Limited.

Maruti Suzuki India Ltd

Maruti Suzuki India Ltd, established in 1981, became a subsidiary of Suzuki Motor Corporation (SMC) in 2002. The company is the market leader in India’s passenger vehicle segment and SMC’s largest subsidiary in terms of production and sales. SMC holds a 56.28% equity stake in Maruti. The company has a market cap of ₹3,99,289.70 crore and the share price of Maruti Suzuki India opened at ₹12,689.90, touching the day’s high of ₹12,877.85, on October 4, 2024.

Tata Motors

Tata Motors, part of the Tata conglomerate, is a global leader in the automobile sector, offering a diverse range of vehicles. It has a market cap of ₹3,48,027.59 crore and the share price of Tata Motors opened at ₹930.00, touching the day’s high of ₹947.75, on October 4, 2024.

Mahindra & Mahindra Ltd

Mahindra & Mahindra Ltd, a diversified automobile company, operates across various vehicle segments. With a market cap of ₹3,86,457.67 crore, the share price of Mahindra & Mahindra opened at ₹3,127.05, touching the day’s high of ₹3,157.60, on October 4, 2024.

Hyundai IPO

Hyundai Motor India will launch its IPO on October 15, 2024, and it is going to be the largest IPO in Indian market history. Through an offer for sale (OFS) of up to 14.2 crore shares, Hyundai aims to raise between Rs. 26,505 crore and Rs. 27,856 crore, with the share price set between Rs.1,865 and Rs.1,960 per share. The IPO subscription will be open to institutional investors starting on October 14 while retail investors can bid between October 15 and October 17.

When Hyundai goes public, it will find itself competing with well-established automotive giants like Tata Motors, Maruti Suzuki, and Mahindra & Mahindra, which have already carved out strong positions on Indian stock exchanges. Hyundai IPO can present investors with the opportunity to invest in another global automotive leader.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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Hyundai Motor India IPO: KIA Brand Conflict and Liquidity Risks Raised

Hyundai Motor India, a subsidiary of South Korea’s Hyundai Motor Company and the second-largest car manufacturer in the Indian passenger vehicle market since FY09, is set to launch its much-anticipated ₹27,870 crore IPO on October 15. It is going to be the largest offering in India since the ₹21,000 crore LIC IPO.

The price band ranges from ₹1,865 to ₹1,960 per share and a minimum investment threshold is ₹13,720 for one lot of seven shares.

As Hyundai prepares to go public, concerns remain regarding potential brand conflicts with Kia and liquidity issues that could affect its long-term growth. These factors could impact investor confidence and the company’s performance in the competitive automotive market.

Brand Conflict: Hyundai vs KIA

A point of concern will be the conflict of interest between Hyundai Motor India and its sibling brand, Kia. The two brands share resources in various areas, such as vehicle model and engine development, which creates the potential for overlapping markets.

Also, Hyundai supplies engines to Kia, heightening the risk of product overlap and conflicting interests between the two brands. The red herring prospectus (RHP) reveals that Hyundai has acknowledged the risk of conflicts arising from the shared interests of Hyundai Motor Company and its affiliates, including Kia.

Kia’s entry into the Indian market in FY20 has resulted in a notable decline in Hyundai’s market share. Hyundai closed FY24 with a 15% share of the domestic market, down from 17.5% in FY20, while Kia ended FY24 with a market share of approximately 6%. Both companies are now poised to launch electric vehicles (EVs) in India.

Liquidity Concerns

As Hyundai Motor India prepares for its market debut, maintaining financial health and ensuring sufficient liquidity will be paramount. In March 2024, Hyundai Motor India paid a special dividend to its promoter, Hyundai Motor Company (HMC). This resulted in tax liabilities reported as current liabilities on the balance sheet as of March 31, 2024, which was settled in three months ending June 30, 2024, causing a decrease in cash flows.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.