Hyundai Motor India is planning a huge Initial Public Offering (IPO) to raise between Rs 20,800 crores ($2.5 billion) and Rs 25,000 crores ($3 billion). According to their draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), they will offer 142.2 million shares, which is 17.5% of the company’s shares after the IPO. If successful, this IPO will be bigger than the Life Insurance Corporation of India’s (LIC) record $2.7 billion IPO in 2022.
Details of the Offering
This IPO could greatly impact the Indian stock market and value Hyundai Motor India at between Rs 2.08 lakh crore ($25 billion) and Rs 2.5 lakh crore ($30 billion). This shows how strong Hyundai Motor India is as the second-largest carmaker in India, just behind Maruti Suzuki. In the fiscal year 2023, Hyundai Motor India made Rs 60,000 crore in revenue and Rs 4,653 crore in profits, making it the most profitable unlisted car manufacturer in the country.
Hyundai Motor India plans to sell 35% of the shares to regular individual investors, aiming to get more people involved and increase market activity. This move is designed to attract more investors to one of India’s top car brands.
Historical Context and Future Prospects
Hyundai Motor Co., the South Korean parent company, started its first factory in India in 1998. Since then, Hyundai has become a major player in the Indian market, now holding a 15% market share. Recently, Hyundai announced plans to invest about $3.75 billion in India to increase production and boost its electric vehicle (EV) lineup.
Strategic Benefits
The DRHP points out several benefits of the IPO, such as better brand visibility, improved brand image, and creating a public market for its shares in India. These advantages are expected to help Hyundai Motor India compete more effectively with both local companies like Tata Motors and international companies like Tesla.
As Hyundai Motor India moves forward with this significant IPO, it aims to set a new record in the Indian stock market and demonstrate its commitment to growth and innovation in one of the world’s fastest-growing car markets.