Want to Invest in Hyundai Motor India Ltd. IPO? Read this First
When Hyundai Motor India Ltd. filed its draft papers with SEBI for an initial public offering (IPO), it created a lot of buzz and understandably so. After all, the IPO would be the first by an automaker in the country in over 20 years after Maruti Suzuki went public in 2003 . Not only that, the mammoth size of the IPO has also been a major talking point. With the ball all set to roll in the coming days, here are some key details about this IPO.
About Hyundai Motor India Ltd .
Hyundai Motor India Ltd. is part of the Hyundai Motor Group, the third-largest auto original equipment manufacturer (OEM) in the world based on passenger vehicle sales in CY2023, according to a CRISIL report. It's been the second-largest auto OEM in the Indian passenger vehicle market since the 2009 fiscal year and has a track record of manufacturing and selling reliable, feature-rich, innovative, and backed by the latest technology four-wheeler passenger vehicles.
The automaker has a portfolio of 13 models across multiple passenger vehicle segments by body type, such as sedans, hatchbacks, sports-utility vehicles (SUVs) and battery electric vehicles (EVs). Since 1998 and up to March 31, 2024, it has cumulatively sold nearly 12 million passenger vehicles in India and through exports.
Hyundai Motor India Ltd IPO details
Hyundai Motor India’s IPO doesn’t consist of any fresh issue but only an offer for sale. This table captures vital IPO details:
| Particulars | IPO Details |
|---|---|
IPO opens on | 15th Oct 24 |
IPO closes on | 17th Oct 24 |
Equity shares in offer for sale | Up to 142,194,700 |
Face value | ₹10 |
Book running lead managers | Kotak Mahindra Capital Company Ltd. Citigroup Global Markets India Pvt Ltd. HSBC Securities and Capital Markets (India) Pvt. Ltd. J.P. Morgan India Pvt. Ltd. Morgan Stanley India Company Pvt. Ltd. |
Name of registrar | KFin Technologies Ltd. |
Financial snapshot
Here are the key financial metrics that can help you evaluate its financial standing:
| Particulars | FY 23 | FY 22 | FY 21 |
|---|---|---|---|
Total equity and liabilities (in ₹ crores) | 34,573 | 28,358 | 26,730 |
Total income (in ₹ crores) | 61,436 | 47,966 | 41,404 |
EBITDA (excluding other income in ₹ crores) | 7,548 | 5,486 | 4,245 |
Basic and diluted earnings per share | 57 | 35 | 23 |
Return on net worth (RoNW) | 23.48% | 17.21% | 12.29% |
Profit after tax (in ₹ crores) | 4,709 | 2,901 | 1,881 |
Offer structure
Like any IPO, Hyundai Motor India Ltd IPO. has fixed allocation quota for different categories for investors, including qualified institutional bidders (QIBs), non-institutional bidders (NIBs) and retail individual bidders (see table).
| Allocation for | Shares allotted |
|---|---|
QIBs | Not more than 71,097,350 equity shares |
NIBs | Not less than 21,329,205 equity shares |
Retail individual bidders | Not less than 49,768,145 equity shares |
Company strengths
Hyundai Motor India Ltd. has the following strengths:
- Second-largest auto OEM in India and the largest exporter of passenger vehicles
- A diverse portfolio of passenger vehicles across powertrains and major passenger vehicle segments
- Ability to identify emerging market trends in a timely manner and introduce innovative passenger vehicles and technologies to meet customer needs in India
- Pan-India sales, distribution and after-sale services network offered by its dealers
- Digitisation across the value chain
- Flexible and automated manufacturing capabilities
- Experienced management team with a track record of delivering profitable growth and superior returns
Business strategies
Going forward, the company plans to implement the following business strategies:
- Leveraging its deep understanding of consumer preferences to successfully expand its passenger vehicle portfolio
- Focus on continued premiumisation of its passenger vehicle portfolio
- Calibrated manufacturing capacity expansion and efficient capital allocation
- Focus on increasing EV market share
- Further strengthening its position as the export hub for Hyundai Motor Company (HMC)
- Continue to enhance its brand in India
- Deepen its physical and digital network for sales and services across India
Industry overview
According to CRISIL MI&A, India had 26 cars per 1,000 people as of the 2024 fiscal. Although the penetration grew from 22 cars per 1,000 people in fiscal 2019, it is significantly lower than that of developed nations and even emerging nations. This provides significant headroom for growth, especially given the expected increase in disposable incomes, faster economic growth, a younger population, and increased focus from international OEMs.
Also, the Government of India has announced and implemented several initiatives, such as the National Infrastructure Pipeline, Gati Shakti Scheme, and National Logistics Policy, to improve the country's transportation infrastructure.
Summing it up
As an investor, it’s important for you to evaluate all aspects of this IPO before investing. Go through the red herring prospectus (RHP) for a holistic understanding of the company and various other aspects.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.
