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India is going to have its biggest IPO pretty soon. Hyundai Motor India has secured Security and Exchange Board of India (SEBI) approval for its $3 billion IPO, which values the company at around $20 billion. The previous biggest IPO that the Indian market saw was LIC's $2.7 billion IPO. Apart from being the biggest IPO, it would also be the first car manufacturer to get listed in India in two decades, following Maruti Suzuki's IPO in 2003. Let us look at the company and the IPO details.
Hyundai Motors India is a part of the Hyundai Motor Group, the third largest auto original equipment manufacturer (OEM) in the world based on passenger vehicle sales in CY23. They have been the second-largest auto OEM in the Indian passenger vehicles market since FY09 (in terms of domestic sales volumes).
The company has a track record of manufacturing and selling four-wheeler passenger vehicles that are reliable, feature-rich, innovative, and backed by the latest technology. This is demonstrated in their 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). They also manufacture parts, such as transmissions and engines.
They have also been India’s largest exporter of passenger vehicles from FY05 to the first 11 months of FY24, having exported the highest cumulative number of passenger vehicles for the same period. Since 1998 and up to March 31, 2024, they have cumulatively sold nearly 12 million passenger vehicles in India and through exports.
Below are financial numbers of Hyundai Motors:
Particulars | 9MFY24 | FY23 | FY22 | FY21 |
Revenue (Crore) |
52,157.91 |
60,307.58 |
47,378.58 |
40,972.25 |
Domestic |
76.34% |
76.59% |
78.80% |
81.21% |
Exports |
23.66% |
23.41% |
21.20% |
18.79% |
Revenue growth (YoY%) |
* |
27.29% |
15.64% |
* |
Profit (Crore) |
4,382.87 |
4,709.25 |
2,901.59 |
1,881.16 |
Profit Margin |
8.22% |
7.67% |
6.05% |
4.54% |
EBITDA (Crore) |
6,610.77 |
7,548.78 |
5,486.09 |
4,245.66 |
EBITDA Margin |
12.67% |
12.52% |
11.58% |
10.36% |
ROCE (%) |
27.19% |
28.75% |
20.37% |
15.38% |
Below are different things the company does:
Below is a SWOT Analysis of Hyundai Motors
Strenghts | Weaknesses |
Second largest auto OEM in India and the largest exporter of passenger vehicles |
Increases in the prices of parts and materials required for operations |
Diverse portfolio of passenger vehicles across powertrains and major passenger vehicle segments |
Depend on a limited number of suppliers for parts and materials |
Pan-India sales, distribution and after-sale services network offered by their dealers |
Global operations involve challenges and risks that could increase their costs |
Opportunities | Threats |
Leveraging deep understanding of consumer preferences to successfully expand passenger vehicle portfolio |
Hyundai faces intense competition from other domestic and international car manufacturers |
Focus on continued premiumisation of passenger vehicle portfolio |
Changes in government policies or regulations could affect the profitability of the automotive industry |
Focus on increasing EV market share |
Rapid advancements in technology, such as autonomous vehicles, could disrupt the traditional automotive industry |
The IPO is expected to hit the market at the end of 2024 or early next year. Currently, the listing would be purely Offer for Sale (OFS). The company said, "The objects of the offer are to carry out the Offer for Sale of up to 142,194,700 Equity Shares of the face value of Rs 10 each by the Promoter Selling Shareholder and to achieve the benefits of listing the Equity Shares on the Stock Exchanges".
The company expects that listing the Equity Shares will enhance our visibility and brand image and provide liquidity and a public market for the Equity Shares in India.
Conclusion
No doubt Hyundai Motors is an excellent company and investors should look forward to its IPO. However, investors should also check the valuations at which the IPO will launch. As per the data available, the company is seeking a premium valuation compared to its listed peers - Maruti Suzuki and Mahindra and Mahindra.
The second largest auto OEM in India and the largest exporter of passenger vehicles
They have consistently been the largest auto OEM in India by sales volume in the mid-size SUV sub-segment from Fiscal 2019 to the first 11 months of Fiscal 2024.Their 2016 India Car of the Year (ICOTY) awardee, Creta had a market share of 30% in the mid-size SUV sub-segment in the first 11 months of Fiscal 2024.They were also the India’s largest exporter of passenger vehicles from Fiscal 2005 (Source: CRISIL Report, Company DRHP)
They have a diverse portfolio of passenger vehicles across powertrains and major passenger vehicle segments
Their current portfolio of passenger vehicles caters to a diverse customer base offering “something for everyone".portfolio of 13 passenger vehicle models across major passenger vehicle segments by body type include sedans (Aura and Verna), hatchbacks (Grand i10 NIOS, i20 and i20 N Line) and SUVs (Exter, Venue, Venue N Line, Creta, Creta N Line, Alcazar, Tucson and IONIQ 5)(Source: CRISIL Report, Company DRHP)
Pan-India sales, distribution and after-sale services network offered by their dealers
As of December 31, 2023, we had 1,366 sales outlets across 1,031 cities and towns in India and 1,550 service centres across India across 962 cities and towns in India. As per the CRISIL Report, their sales and service network was the second largest in India in terms of the number of customer touchpoints as of March 31, 2023.(Source: Company DRHP).
Depends on a limited number of suppliers for parts and materials
They depend on a limited number of suppliers for the procurement of parts and materials required for their manufacturing operations.The operations of their suppliers could be affected by external factors such as adverse weather conditions, labour strikes, facility or machine malfunctions and shortages of materials, among others, which could have material adverse affect on supplies to them and their production timelines. (Source: Company DRHP)
Their Company, one of their Subsidiaries and their Promoter are involved in outstanding legal proceedings
In the ordinary course of business, their Company, one of their Subsidiaries and their Promoter are involved in certain legal proceedings pending at different levels of adjudication before various courts and tribunals.An adverse outcome in any of these proceedings, either individually or in aggregate, may affect their reputation, business operations, cash flows, financial condition, results of operations and prospects.(Source: Company DRHP)
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Retail Individual Investor | |
Non-Institutional Investor | |
Qualified Institutional Buyers | |
Employee | |
Overall |
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Go to the IPO section, select the IPO you want to apply from the list and click on ‘Apply’.
Fill in the quantity of the number of shares you want to buy. To apply at maximum price, check the cut-off price box and amount is auto calculated. If you want to apply at some other price within the price band, then you can enter the price manually by clicking on “Add bid” option.
Click on proceed to confirm the order. You can view the placed order under “order book”.
Choose the IPO you want to apply from the list. Click on Apply.
Fill in the quantity of shares. To apply at maximum price, check the cut-off price box and amount is auto calculated. If you want to apply at some other price within the price band, then you can enter the price manually by clicking on “Add bid” option.
Check the A/C, UPI details and click on proceed. You will get an UPI link by which payment can be made.
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The lot size is 7 shares and minimum investment required is Rs.13,720 for Hyundai IPO
Hyundai IPO opens from 15th Oct and closes on 17th Oct.
The allotment date is 18th Oct and the listing date is 22nd Oct for Hyundai IPO.
The price band of Hyundai IPO is Rs.1865 - Rs.1960
The book runners for Hyundai Motor India IPO are Kotak Mahindra Capital Company Ltd, Citigroup Global Markets India Pvt Ltd, Hsbc Securities & Capital Markets Pvt Ltd, J.P. Morgan India Pvt Ltd, Morgan Stanley India Company Pvt Ltd
Hyundai IPO is mainboard IPO of issue size up to Rs.27,870.16 Crores
The objective of Hyundai IPO is (i) to carry out the Offer for Sale of up to 142,194,700 Equity Shares of face value of ₹ 10 each by the Promoter Selling Shareholder and (ii) achieve the benefits of listing the Equity Shares on the Stock Exchanges
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