Hyundai Motor India Sets New Dividend Benchmark with IPO-Backed Expansion

Hyundai Motor India Ltd. (HMIL) has become a member of the group of Indian businesses that paid out more than ₹10,000 crores in dividends during the 2024 fiscal year. With the firm preparing for the much awaited IPO, Hyundai announced a special dividend of ₹13,270 per share, or 1,327% of the total dividend. With this, the total amount of dividends paid out in FY24 is ₹10,782.42 crores. Hyundai paid out a total of ₹4,653.42 crores in dividends in FY23 compared to ₹1,493.45 crores in FY22.

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Hyundai Motor India is anticipated to make waves with its Hyundai Motor IPO, a highly anticipated listing within the Indian market. Investors are closely monitoring the Hyundai Motor IPO subscription status to gauge interest and demand, as well as the Hyundai Motor IPO anchor allocation is 28.90% to attract major institutional interest, enhancing the overall demand for the offering.

After the 2025 fiscal year, Hyundai Motor India Ltd. will unveil a new dividend policy, as stated by Tarun Garg, the company's chief operating officer. Speaking on the first day of the much awaited business's IPO, Garg emphasized the importance of the company striking a balance between investing for development and shareholder returns.  "If we take into account the returns, cash position, capex requirement, but most importantly we’d like to benchmark with the industry best practices and look at the shareholders returns very closely," he stated.  As of 11:09 a.m. on Tuesday, the largest initial public offering (IPO) globally in 2024 had been subscribed 0.08 times, or 8%.

Phase Two of Growth: 

According to Garg, the IPO ushers in Hyundai Motor India's second chapter of expansion, offering prospects to investors worldwide as well as locally. "This IPO is a crucial milestone in our growth journey," he said, adding that his company is the second-largest participant in the Indian passenger car market. Additionally, he was pleased with the reaction from anchor investors, especially the local mutual funds that made up 31.4% of the anchor book. "This is a strong endorsement of our strategy to localise our operations further," Garg stated.

India ranks third internationally for Hyundai, the company's passenger car maker and considers it a crucial market, behind the United States and Korea. According to Garg, the business is in a good position to boost output and satisfy rising demand.  "We currently have a production capacity of 8.24 lakh units, and with the addition of our Pune plant, another 2.5 lakh units will be added, providing us with significant headroom for both domestic and export growth," he stated. The business is also getting ready to increase the range of electric vehicles it offers. In the upcoming quarter, one of our strongest brands, Creta, will join the EV market as we want to compete in the high-volume EV segment.
In the middle term, three additional EV models will follow, all supported by significant localization, such as the local production of lithium iron phosphate, or LFP, cells in collaboration with an Indian partner, according to Garg.

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The Effect of IPOs on Business: 

Regarding business, Garg said that Hyundai will be better able to interact with ordinary investors and adhere to international standards as a result of the IPO.  "Quarterly calls will help us stay in better contact with our investors and audience after the IPO. This will support our continued efforts to achieve governance and operational excellence," he added.  Hyundai anticipates that the IPO would improve its position in the market and spur innovation in the car industry.

What Makes Hyundai Unique?

According to the COO, Hyundai's dominance of the industry is largely due to its success in the SUV sector.  "The introduction of the Creta altered the fact that SUVs only made only 13% of overall sales in 2015. SUV sales currently account for 52% of Hyundai's overall sales in India, according to Garg.  He attributed Hyundai's success to its awareness of the Indian market and its determination to set new standards for design, technology, and features. "This IPO will enable us to grow further, both in India and globally, and we can only go up from here," added Garg.
 
To Summarize

Hyundai Motor India Ltd. (HMIL) declared a record dividend of ₹13,270 per share, totalling ₹10,782.42 crore for FY24 as it prepares for its IPO. The company aims to balance growth with shareholder returns through a new dividend policy aligning with industry standards. COO Tarun Garg highlighted Hyundai's robust future, driven by a growing production capacity, expansion into EVs, and increased localization. The IPO marks Hyundai’s next growth phase, enhancing its investor engagement and commitment to operational excellence.