Hyundai Motor India, owned by Hyundai Motor Company, is launching one of the biggest IPOs in India this week, following the Life Insurance Corporation’s ₹21,000 crore public issue in 2022. Here are 10 key points to know before subscribing to the IPO:
1) IPO Date
The IPO will remain open for subscription from October 15 to October 17, 2024. The anchor book details were disclosed on October 14.
2) Price Band
The price band for the IPO is set at ₹1,865-1,960 per share.
3) IPO Size
The IPO is an offer-for-sale of 14.2 crore equity shares by the parent firm, Hyundai Motor Company, targeting ₹27,870.2 crore at the upper price band. Additionally, 7,78,400 shares have been reserved for employees, available at a discount of ₹186 per share.
4) Objectives of the IPO
As it is an offer-for-sale, all IPO funds, excluding issue expenses, will go to the parent company. The primary objective is to complete the offer-for-sale and gain the benefits of listing on the stock exchanges.
5) Reservation of Shares
The IPO has reserved:
- 50% for qualified institutional buyers (QIBs)
- 15% for non-institutional investors
- 35% for retail investors
Retail investors can bid for a minimum of 7 shares, amounting to ₹13,720 at the upper price band, with a maximum investment of ₹1,92,080.
6) Company Profile
Hyundai Motor India is the second-largest auto OEM in the Indian passenger vehicle market, holding a 15% market share. It operates a manufacturing plant in Chennai, with a capacity of 8,24,000 units annually, and acquired a plant in Talegaon, Maharashtra in 2023. When fully operational, the company’s total annual production capacity is expected to rise to 10,74,000 units.
7) Financial Performance
- FY24 Net Profit: ₹6,060 crore (up 28.7% YoY)
- FY24 Revenue: ₹69,829 crore (up 15.8% YoY)
- EBITDA FY24: ₹9,132.6 crore (up 21% YoY), with an EBITDA margin of 13.08%.
- For Q1 FY25, profit stood at ₹1,489.6 crore (up 12.1% YoY), and revenue was ₹17,344.2 crore (up 4.3% YoY).
8) Promoter and Dividend Payout
Hyundai Motor Company holds 100% of Hyundai Motor India. The company paid ₹10,782.4 crore in dividends in FY24, which significantly reduced its cash balance to ₹9,017.3 crore by the end of FY24.
9) Risk Factors
Potential risks include:
- Increased competition from both listed and unlisted players like Kia Motors, Honda, and Skoda.
- Dependence on SUVs, which make up 67% of the company’s volume.
- Possible conflicts of interest with Kia Corporation and Kia India, also part of the Hyundai group.
- Increases in parts prices or disruptions in the supply chain could impact operations.
10) Allotment and Listing Dates
The IPO allotment will be finalized by October 18, with shares credited to successful investors’ demat accounts by October 21. The listing will take place on the BSE and NSE on October 22. The shares are currently trading at a 2-3% premium in the grey market.
Lead Managers
The IPO is being managed by Kotak Mahindra Capital, Citigroup Global Markets India, HSBC Securities, JP Morgan India, and Morgan Stanley India. KFin Technologies is the registrar for the offer.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
