WATCH | All you need to know about Hyundai Motor's IPO

Hyundai Motor’s IPO : Hyundai Motor India is set to make history with its highly anticipated initial public offering ( IPO ), marking first time an automaker has gone public in India since Maruti Suzuki ’s 2003 debut. 

offering is expected to raise up to Rs 27,870 crore, making it potentially largest IPO in India’s history and second-largest globally in 2024.

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Key Details of IPO

Issue Dates: Retail and or investors can place orders between October 15 and 17.

Price Band: Shares are priced between Rs 1,865 and Rs 1,960.

Offer Structure:  IPO is entirely an Offer for Sale (OFS), with Hyundai Motor Group, South Korean parent company, reducing its stake in Hyundai Motor India from 100 per cent to 82.5 per cent. In an OFS, existing shareholders sell ir shares to public, and no new shares are issued. Hence, proceeds will go to selling shareholders, not company.

Key Investors and Demand

Anchor investors, including BlackRock and Singapore’s sovereign wealth fund, have alrey invested Rs 8,315 crore, indicating strong demand ahe of public offering.

Hyundai’s Financial Performance

Hyundai Motor India’s financial performance has been robust despite challenges in auto sector. For quarter ending June 30, 2024, company posted revenue of Rs 17,567.98 crore and a net profit of Rs 1,489.65 crore. Over past two years, its revenue has grown at a compound annual growth rate (CAGR) of 21 per cent, with profits rising by 45 per cent.

Hyundai holds a 15 per cent market share in India, second only to Maruti Suzuki , and is betting on future growth through a strong SUV lineup and expansion into electric vehicles (EVs), including planned launch of Creta EV in FY25. ditionally, company’s expansion of its Talegaon facility in Maharashtra will help boost production capacity for both domestic and export markets.

Broer Implications for Auto Sector

Hyundai’s IPO comes at a time of strong growth in India’s automotive sector, but also amid challenges such as rising raw material costs and shifting consumer preferences. 

Despite se pressures, company’s listing signals confidence in India’s capital markets. Alrey, over $9 billion has been raised through IPOs in 2024, indicating strong market appetite. Analysts believe that Hyundai’s IPO could encourage or automakers and large corporations to explore public listings.

Risks and Competition

While Hyundai’s IPO has generated excitement, investors should consider risks, including rising competition from players like Tata Motors and newer entrants such as Kia Motors. ditionally, Hyundai relies on its parent company for some components, paying a 3.5 per cent royalty fee, which could impact profits.

Analyst Ratings and Outlook

IPO has been rated “Subscribe for Long Term” by analysts, who view its competitive pricing as appealing. Hyundai’s strong financials, growing market share, and ambitious plans in EV space position it as an attractive investment for long-term investors.

What’s Next?

allotment for Hyundai’s IPO is expected to be finalised on October 18, with company’s stock expected to list on October 22. Investors and industry watchers alike will be closely monitoring Hyundai’s stock performance post-listing, as it could set a benchmark for future IPOs in Indian automotive and broer corporate landscape.