Hyundai Motor IPO: Price Band Set at ₹1865-₹1960, Opens on 15th October 2024

Incorporated in May 1996, Hyundai Motor India Limited is a part of the Hyundai Motor Group, which is the third largest auto original equipment manufacturer (OEM) in the world based on passenger vehicle sales. The company manufactures and sells reliable, feature-rich, and innovative four-wheeler passenger vehicles backed by the latest technology. As of 31st March 2024, the company has sold nearly 12 million passenger vehicles in India and through exports. The company's manufacturing plant near Chennai can produce its full range of vehicle models, and it exports products to various countries in Africa, the Middle East, and South Asia.

The Objectives of the Issue

The company will not receive any proceeds from the Offer. The Promoter Selling Shareholder will receive all the Offer Proceeds after deduction of Offer related expenses and relevant taxes thereon, to be borne by the Promoter Selling Shareholder.

Highlights of Hyundai Motor IPO

Hyundai Motor IPO is set to launch with a book-built issue of ₹27,870.16 crores. The issue is entirely an offer for sale. Here are the key details of the IPO:

• The IPO opens for subscription on 15th October 2024 and closes on 17th October 2024.
• The allotment is expected to be finalised on 18th October 2024.
• Refunds will be initiated on 21st October 2024.
• Credit of shares to Demat accounts is also expected on 21st October 2024.
• The company will tentatively list on BSE and NSE on 22nd October 2024.
• The price band is set at ₹1865 to ₹1960 per share.
• The offer for sale comprises 14.22 crore shares, aggregating to ₹27,870.16 crores.
• The minimum lot size for the application is 7 shares.
• Retail investors need to invest a minimum of ₹13,720.
• The minimum investment for small NII (sNII) is 15 lots (105 shares), amounting to ₹205,800.
• The minimum investment for big NII (bNII) is 73 lots (511 shares), amounting to ₹1,001,560.
• Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, J.P. Morgan India Private Limited and Morgan Stanley India Company Pvt Ltd are the book running lead managers for the IPO.
• Kfin Technologies Limited serves as the registrar.

Hyundai Motor IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 17th October 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Hyundai Motor IPO Issue Details/Capital History

Hyundai Motor IPO is scheduled from 15th October to 17th October 2024, with a price band of ₹1865 to ₹1960 per share and a face value of ₹10. The total issue size is 14,21,94,700 shares, raising up to ₹27,870.16 crores through an offer for sale. The IPO will be listed on BSE and NSE. The pre-issue shareholding is 81,25,41,100 shares, and there will be no change in the post-issue shareholding. The company has raised ₹8,315.28 crore from anchor investors, with 4,24,24,890 shares allocated to them.

Hyundai Motor IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 7 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Hyundai Motor India Ltd

Strengths:

• Part of the third-largest auto OEM globally
• Strong brand presence in India with nearly 12 million vehicles sold
• Diverse product portfolio including sedans, hatchbacks, SUVs, and EVs
• Extensive sales and service network across India
• Strong export presence in multiple countries

Weaknesses:

• Dependency on a single manufacturing plant in Chennai
• High competition in the Indian automotive market

Opportunities:

• Growing demand for SUVs and electric vehicles in India
• Potential for expansion in Tier 2 and Tier 3 cities
• Increasing focus on sustainable mobility solution
  

Threats:

• Intense competition from both domestic and international automakers
• Regulatory changes affecting the automotive industry
• Economic slowdowns impacting consumer spending on vehicles

Hyundai Motor India Limited has shown significant growth in recent years. The company's revenue increased by 16%, and profit after tax (PAT) rose by 29% between the financial year ending on 31st March 2024 and 31st March 2023.

Revenue has seen substantial growth, rising from ₹479,660.48 lakh in FY22 to ₹713,023.25 lakh in FY24, marking an impressive increase of 48.7% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹29,015.91 lakh in FY22 to ₹60,600.44 lakh in FY24, representing a substantial growth of 108.9% over two years.

Net Worth has shown fluctuations but overall growth, increasing from ₹168,562.55 lakh in FY22 to ₹200,548.18 lakh in FY23, before decreasing to ₹106,656.57 lakh in FY24.

Total Borrowings have decreased from ₹11,400.33 lakh in FY22 to ₹7,679.15 lakh in FY24, which represents a decrease of about 32.6% over two years.

The company's financial performance shows a trend of strong revenue growth and significantly improving profitability. The substantial increase in PAT and the decrease in borrowings indicate a strengthening financial position. However, investors should note the fluctuations in Net Worth. Investors should evaluate these financial trends along with the company's market position and future growth prospects when considering the IPO.