The Company’s History

Hyundai Motors India entered the Indian market in 1996, setting up its first manufacturing facility in Sriperumbudur, Tamil Nadu. In just over two decades, Hyundai has grown to become the second-largest automobile manufacturer in India, trailing only Maruti Suzuki. From its humble beginnings with the launch of the Hyundai Santro in 1998, which revolutionized the small car segment in India, the company has consistently introduced popular models catering to a broad range of customers.

Hyundai is known for its innovative products, strong brand presence, and technological advancements. Models such as the Hyundai i10, i20, Creta, Venue, and Verna have become household names, and the company’s portfolio now spans across various segments including hatchbacks, sedans, SUVs, and electric vehicles.

Hyundai’s Indian Market Position

India is one of the largest automobile markets globally, and Hyundai has captured a substantial portion of this. The company holds about 15-18% market share in India’s passenger vehicle segment, solidifying its position as a major player. Its dominance in the compact SUV segment, with models like the Creta and Venue, has further boosted its brand value and sales figures.

What differentiates Hyundai in the Indian market is its adaptability to local preferences and its ability to deliver value-for-money cars. The company also operates two state-of-the-art manufacturing facilities in India, with a combined production capacity of 750,000 vehicles annually. Hyundai has an extensive dealer and service network across the country, further enhancing its reach and customer support.

The Upcoming Hyundai Motors India IPO

Hyundai Motors India has historically operated as a fully-owned subsidiary of the South Korean parent company. However, recent industry speculation indicates that Hyundai may be gearing up to go public in India. Though there has been no official announcement regarding the timeline or specific details, the potential listing has already garnered significant interest among market analysts and investors.

1. Why an IPO Now?

The timing of this potential IPO could be a strategic move, given the current favorable market conditions:

• Rising Consumer Demand: India’s auto sector has been on a recovery path post-pandemic, with strong consumer demand for both ICE (Internal Combustion Engine) vehicles and electric vehicles (EVs). Hyundai has been a front-runner in both segments.
• Electrification and EV Push: Hyundai Motors India has already made strides in the electric vehicle market with its Kona Electric and has announced plans to introduce more EV models, aligning with India’s push toward sustainable transportation. The IPO could provide the capital needed for further investments in EV infrastructure and R&D.
• Valuation Maximization: Hyundai’s current market position, consistent growth, and future potential in India may provide an ideal scenario for maximizing valuations through the IPO.

2. IPO Size and Use of Funds

Although exact details are yet to emerge, market insiders speculate that Hyundai Motors India’s IPO could be substantial. The company could raise billions through this offering, which would make it one of the largest automotive IPOs in India.

The proceeds from the IPO are likely to be used for:

• EV Expansion: Hyundai has been vocal about its intentions to be a leader in India’s EV market. The IPO could help fund the development of new EV models, set up charging infrastructure, and enhance R&D.
• Capacity Expansion: Hyundai’s existing manufacturing units may see capacity expansion as demand for their products continues to rise. The IPO funds could also support upgrading current facilities with cutting-edge technology.
• Debt Reduction and Working Capital: Like many global automakers, Hyundai has faced supply chain disruptions and rising input costs. Some of the funds may go toward stabilizing the balance sheet and ensuring smoother operational liquidity.

3. What It Means for Investors

The Hyundai Motors India IPO is set to be one of the most sought-after listings, and there are several reasons why investors should take note:

• Strong Brand and Market Presence: Hyundai is a household name in India with a proven track record of performance, making it a stable and attractive investment.
• Growth Potential in EVs: As the Indian government pushes for greener transportation, Hyundai’s focus on electric mobility positions it well for long-term growth. Investors looking for exposure to the EV sector may find Hyundai’s stock an attractive opportunity.
• Global Expertise, Local Success: Hyundai’s global expertise combined with its understanding of the Indian market has resulted in successful products across various segments. This blend of global and local know-how adds credibility to its business strategy and future plans.

4. Risks to Consider

While Hyundai Motors India is a promising investment, there are certain risks that potential investors should keep in mind:

• Market Competition: Hyundai faces stiff competition from both local players like Maruti Suzuki and global entrants such as Kia, MG Motors, and Tata Motors. These companies are also vying for leadership in the EV space.
• Regulatory and Economic Challenges: India’s regulatory environment is complex, and changes in emission norms, import duties, and taxation policies can impact profitability. Additionally, rising fuel prices and inflation could affect consumer spending in the short term.

The Future of Hyundai Motors India Post-IPO

The upcoming IPO marks a pivotal moment for Hyundai Motors India, signaling its ambitions for growth and expansion, particularly in the EV segment. With strong brand recognition, a solid foothold in the Indian market, and a clear focus on innovation, the company is well-positioned to attract a range of investors—both retail and institutional.

The success of Hyundai’s IPO could also lead to a wave of other automotive companies considering listings, further boosting the Indian stock market and contributing to the country’s economic growth.

Hyundai Motor India Ltd. (HMIL), the Indian arm of Hyundai Motor Company, is gearing up for its much-anticipated Initial Public Offering (IPO), set to launch on October 14, 2024. The IPO is projected to raise ₹25,000 crore (approximately $3 billion), making it one of the largest public offerings in India since LIC’s IPO. This IPO will be entirely an Offer for Sale (OFS), where 142.19 million shares will be sold by Hyundai’s South Korean parent company, Hyundai Motor Co. HMIL itself will not receive proceeds from the offering​(Chittorgarh.com)​(MoneyControl).

Financial Highlights

Hyundai Motor India has demonstrated solid financial growth over the years. As of March 2023, the company reported:

• Revenue: ₹61,436.64 crore
• Profit After Tax (PAT): ₹4,709.25 crore
• Assets: ₹34,573.34 crore
• Net Worth: ₹20,054.82 crore​(Chittorgarh.com)​(MoneyControl).

These figures reflect its robust performance as the second-largest carmaker in India after Maruti Suzuki, producing a wide range of vehicles, including popular models like the i20, Creta, Venue, and the electric Ioniq 5.

Grey Market Premium (GMP)

Although the official GMP for Hyundai’s IPO has not yet been announced, market anticipation is high given the company’s strong financials, brand recognition, and growth prospects in the Indian automotive sector (MoneyControl).

This IPO will be listed on both BSE and NSE, and analysts expect it to be a strong performer, backed by Hyundai’s position in India’s automotive market and its well-established global reputation.

Conclusion

Hyundai Motors India’s upcoming IPO is undoubtedly one of the most anticipated events in the Indian automotive and financial sectors. Investors looking to capitalize on the growing automotive market in India, and the country’s shift toward electric mobility, should keep a close eye on this opportunity. With Hyundai’s proven track record, extensive market reach, and future-focused business strategy, this IPO could be a defining moment for both the company and the industry at large.

As more details about the IPO emerge, it will be crucial for investors to analyze Hyundai’s financial health, growth prospects, and competitive positioning to make informed decisions.

Also Read : 13 Essential Checks Before Investing in an IPO