Hyundai Motor India Ltd (HMI) is about to launch India’s largest-ever IPO on October 15, elevating as much as Rs 27,856 crore ($3.3 billion) by an Supply for Sale. South Korea-based international auto big Hyundai Motor Firm, HMI’s promoter, will promote round 14.2 crore fairness shares–17.5 per cent of HMI’s paid-up capital–and obtain all of the proceeds.
HMI, India’s second largest producer and largest exporter of passenger automobiles, has additionally introduced funding price Rs 32,000 crore over the following 8-10 years as a part of its India development technique.
Challenge Measurement
The IPO would be the largest share providing within the historical past of the Indian capital market. The corporate has fastened the value band of the IPO within the vary of Rs 1,865 to Rs 1,960 per fairness share of the face worth of Rs 10, valuing the corporate at round Rs 1.5-1.6 lakh crore. Additionally it is providing a most worker low cost of Rs 186 per fairness share.
The allocation to anchor traders for the IPO is scheduled to happen on October 14, which can shut on October 17, with itemizing on each NSE and BSE on October 22.
Transferring ahead, HMI will concentrate on each quantity and profitability led by enhancements in larger degree of utilisation and localisation, its managing director (MD) Unsoo Kim mentioned at a press briefing Friday. Kim additionally mentioned India’s electrical automobile (EV) market is in “the early stage of electrification” however will “develop strongly and steadily by 2030”. In line with him, HMI will leverage entry to its mum or dad firm’s EV and battery applied sciences to develop an EV ecosystem in India.
“We’re planning to launch 4 EV fashions throughout mass and premium segments, together with our Creta EV in This autumn this monetary yr. Additionally, we’re localising the EV provide chain, just like the battery pack, drivetrain, and many others. and we’re investing within the EV charging infrastructure right here,” Kim mentioned.
Auto Sector Slowdown
In response to considerations over a current slowdown in India’s auto sector, HMI’s chief working officer (COO) Tarun Garg mentioned there was a 40 per cent improve in registrations in September over the earlier month citing Vahan knowledge. Garg additionally attributed sluggish development to excessive ranges of development following the Covid pandemic.
“On a broader degree, the CAGR for the auto trade has been 5%. Nevertheless, publish COVID, due to the pent-up demand, trade noticed a really big development. As an trade, we grew by greater than 20% in 2022. Then, we grew by 9% in 2023. So clearly, some moderation will all the time occur. However that shouldn’t be any worrying issue,” he mentioned.
HMI, the second largest automaker in India after Maruti Suzuki, would be the first auto agency to go public in 20 years after Maruti Suzuki India Ltd’s itemizing in 2003. The IPO will surpass LIC’s IPO of Rs 21,000 crore in 2022 as India’s largest share providing ever.
In line with HMI’s Crimson Herring Prospectus (RHP) filed with the Securities and Change Board of India (SEBI), the corporate sourced 78 per cent of components and supplies from inside India in FY24, under 82.5 per cent in FY22. The share of SUVs out of the corporate’s complete automobile gross sales has risen to 63 per cent in FY24, from 52 per cent in FY22.
The share of inner combustion engine (ICE) automobiles bought by the corporate stood at 88.2 per cent in FY24, adopted by 11.5 per cent compressed pure fuel (CNG) automobiles, and 0.3 per cent EVs. The share of EVs has grown 10 occasions since FY22, when it was 0.03 per cent.
In line with the corporate, since 1998 and as much as March 31, 2024, it has cumulatively bought almost 12 million passenger automobiles in India and thru exports. It posted a complete earnings of Rs 71,302 crore for FY24 and a revenue of Rs 6,060 crore. The full earnings in FY23 stood at Rs 61,436 crore and revenue at Rs 4,709 crore.
