Hyundai IPO to shatter all records? India’s 2nd largest car maker plans Rs 25,000 cr issue

hyundai ipo to shatter all records? india’s 2nd largest car maker plans rs 25,000 cr issue

Hyundai Motor India (HMIL), the country’s second-largest car manufacturer, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) valued at Rs 25,000 crore ($3 billion). This IPO, the largest in India's history, involves an offer-for-sale (OFS) of up to 142.2 million shares, representing a 17.5% stake by the South Korean parent Hyundai Motor Co.

The Economic Times first reported on February 5 that Hyundai was evaluating a plan to list its local unit, aiming to capitalize on India's thriving IPO market. The carmaker was considering selling 15-20% of its stake through an OFS, according to sources.

In 2023, Hyundai Motor's Indian operations accounted for 13% of its global unit sales and contributed 6% to its revenue and profit. Bankers have indicated that subject to SEBI approval and favourable market conditions, the IPO is likely to launch within the next four to six months.

The Rs 21,008-crore public issue of state-owned Life Insurance Corp of India, launched in May 2022, holds the current record for India's largest IPO. Paytm's parent One 97 Communications raised Rs 18,300 crore in November 2021, and Vodafone raised Rs 18,000 crore through a follow-on public offering (FPO) in April this year.

HMIL’s valuation stands at approximately $18 billion (Rs 1.45 lakh crore). In comparison, India’s largest passenger car company, Maruti Suzuki, is valued at Rs 4.04 lakh crore, with Mahindra & Mahindra and Tata Motors valued at Rs 3.64 lakh crore and Rs 3.3 lakh crore, respectively.

HMIL holds a 14.5% market share in the passenger car segment for FY24, trailing Maruti Suzuki's 41.7% and Tata Motors' 13.8%, according to the Society of Indian Automobile Manufacturers (SIAM) cited in the ET report. Between April and December 2023, HMIL sold 584,000 vehicles, including 130,000 exports. The company reported a revenue of Rs 52,158 crore for the nine months ending December 2023, with a net profit of Rs 4,383 crore for the same period.

HMIL dominates the mid-size SUV segment with its popular Creta model, launched in 2015, holding a 30% market share in FY24 despite stiff competition.

The company’s Chennai manufacturing plant had an annual production capacity of 824,000 units as of March 31. HMIL has been the largest exporter of passenger vehicles from FY05 to the first 11 months of FY24, exporting 3.53 million vehicles to over 150 countries since 1996.

Hyundai has invested $5 billion in its Indian operations and has committed an additional $4 billion investment over the next decade, ensuring its continued growth and market presence in India.