Hyundai Motor IPO India is all set to make history with its much-awaited Hyundai Motors IPO, slated to launch on October 14, 2024. The offering, projected to raise a massive ₹25,000 crore, will be the largest IPO in India’s history, surpassing the ₹21,000 crore mark set by Life Insurance Corporation (LIC). With such a high-stakes debut, the Hyundai IPO is already generating significant buzz among investors and market watchers. Let’s dive into the key financial highlights, risks, and what this record-breaking IPO could mean for India’s capital markets.

Hyundai Motors IPO Overview

Hyundai Motors IPO

Reports indicate that Hyundai Motor India’s parent company, Hyundai Motor Company, is eyeing a valuation of around $19 billion for its Indian arm. The company plans to offer 142.19 million equity shares, representing 17.5% of Hyundai Motor India’s total equity, in an Offer for Sale (OFS). This means no fresh equity will be issued, and the funds raised will go directly to the promoter, Hyundai Motor Company.

As the second-largest car manufacturer in India after Maruti Suzuki, Hyundai Motor India’s IPO will mark the first public offering by an automaker in the country in two decades, the last being Maruti Suzuki in 2003.

Financial Performance of Hyundai Motor IPO India

Hyundai Motor India’s financial performance has been solid, with revenue from operations reaching ₹32,488 crore for the nine months ending December 31, 2023. The company recorded a net profit of ₹4,383 crore, with an impressive profit margin of 13.5%. Given these numbers, both domestic and foreign investors are expected to show significant interest in the Hyundai Motors IPO. Neha Agarwal, MD and Head of Equity Capital Markets at JM Financial, noted that IPOs in the Indian market continue to attract massive demand, and India’s biggest IPO is likely to be no different.

Don’t Miss Out on This Historic Investment Opportunity Read more about the Hyundai Motors IPO now

Hyundai Motor India’s Market Strategy

Incorporated in 1996, Hyundai Motor India is a key player in the country’s automotive sector, with popular models like the Grand i10 NIOS, i20, Venue, and the all-electric Ioniq 5. With a network of over 1,300 sales points and 1,500 service outlets, the company has sold nearly 12 million vehicles, both domestically and internationally. The Hyundai IPO will further solidify the brand’s position in India and bring more attention to its ongoing efforts to expand its EV lineup and global footprint.

Hyundai Motor IPO Key Highlights

  • Hyundai Motor IPO Launch Date: October 14, 2024
  • Hyundai Motor IPO Size: ₹25,000 crore ($3 billion)
  • Offer for Sale (OFS): 142.19 million shares
  • SEBI Approval: Received on September 24, 2024
  • Listing: Shares will be listed on both BSE and NSE
  • Price Band: Expected to be announced soon

Hyundai Motor IPO Key Risks

While the Hyundai IPO is set to shatter records, potential investors should carefully weigh the following risks:

  1. Dependence on Traditional Markets: Hyundai relies heavily on established markets like the U.S. and Europe, making it vulnerable to downturns in these regions.
  2. Challenges in the EV Market: Despite its entry into the electric vehicle segment, Hyundai’s market share remains smaller compared to giants like Tesla and Volkswagen.
  3. Supply Chain Issues: Ongoing disruptions, including the global semiconductor shortage, could affect Hyundai’s production capacity and profitability.
  4. Rising Raw Material Costs: The increasing costs of key materials, such as steel and lithium, may pressure Hyundai’s margins.
  5. Regulatory Challenges: Stricter emissions regulations could lead to higher operational costs as Hyundai transitions to green technologies.

Conclusion

The Hyundai Motors IPO is not just another public offering—it’s poised to reshape India’s IPO landscape. With a record-breaking ₹25,000 crore on the line, the offering promises to attract investors far and wide. However, while Hyundai’s strong financials and leadership in the Indian auto market are significant advantages, potential risks like EV challenges, supply chain issues, and rising costs need careful consideration. For investors looking to be a part of India’s biggest IPO, the opportunity is unique but warrants thoughtful analysis of the associated risks.