Hyundai's Historic IPO: A Game-Changer for India's Auto Industry

Hyundai Motor India has set the price range for its public offering between ₹1,865 to ₹1,960 per equity share. This would be the company's largest Initial Public Offering (IPO) in India to date. Hyundai Motor IPO size at the high end of the pricing band is expected to be ₹27,870 crore, exceeding LIC's size of over ₹21,000 crore. The parent company of the corporation will sell 14.2 crore shares, or 17.5% of the entire equity, in the first public offering (IPO), which will be a full offer for sale (OFS).

Bids can be placed for a single lot of seven shares, then for further multiples of seven.

On October 14, anchor investors will place bids for the offering. Subscriptions for the three-day edition will be accepted starting on October 15 and ending on October 17, 2024. 15% of the IPO has been set aside for non-institutional investors (NII), while the remaining half, or 50%, has been earmarked for institutional investors (QIB). Retail investors will receive 35% of the IPO.

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Each share of Hyundai Motor India will have a face value of ₹10. A discount of ₹186 per share will be provided by the firm to qualified workers who participate in the IPO by placing bids. With a 14.6% domestic market share, Hyundai Motor India is the second-largest OEM and the second-largest exporter of passenger cars. Hyundai sold 64,201 units in September, a 10% decrease from the previous year. The business has sold 5.77 lakh units in 2024 thus far, which is unchanged from the previous year.

What Analysts Say About Hyundai Motor India's IPO?

In a note, the brokerage Master Capital Services Ltd stated that Hyundai Motor is India's second-largest automaker, after Maruti Suzuki India. Even though the firm won't use the IPO funds directly for the company, Hyundai Motor India is seen to be stronger as a result of the listing in contrast to Maruti Suzuki, Tata Motors, and other rivals since it may make financing in the future easier. Among its competitors, the company's reported RoNW for FY23 was the highest at 23.48%. This suggests that the business is effectively generating profits using the capital contributed by shareholders.
Hyundai is well-positioned to take advantage of this growth due to their diverse offerings within the industry as compared to its peers who exhibit varied financial metrics, highlighting diverse market strengths, it added. From Fiscal 2019 to 2023, the PV industry saw strong growth, with a healthy 11% CAGR in industry value driven by an 8% CAGR in average vehicle prices and a 3% CAGR in total sales volumes.

To Summarize

Hyundai Motor India is set to launch its largest IPO in India, with a price range of ₹1,865 to ₹1,960 per share, aiming for a total size of ₹27,870 crore. The IPO includes a full Offer for Sale (OFS) of 14.2 crore shares, with allocations for retail, non-institutional, and institutional investors. Analysts view the listing favorably, noting Hyundai's strong RoNW of 23.48% and robust market position, despite a recent sales dip. The company’s diverse offerings position it well for future growth in India's competitive automotive landscape.