After the gloomy moments of the election, the Indian stock market is on fire again with the highly anticipated Hyundai IPO. Valued at $30 billion, Hyundai is planning to raise $2.5 to $3 billion through this IPO. It is planning to sell 17.5% shares! Set to potentially become the second-largest IPO after LIC, this offering brings a lot of excitement and opportunity.
Now, let’s check the interesting facts about the upcoming IPO of this Korean automaker!
1. Largest IPO in India
Do you know, that Hyundai Motor India’s IPO is expected to be the largest in India? You might be curious about the pricing. While Hyundai’s draft prospectus doesn’t specify the exact IPO pricing or the company’s valuation, media sources suggest that Hyundai aims to raise between $2.5 billion and $3 billion. This could peg the company’s valuation at a staggering $30 billion.
If these figures hold true, Hyundai’s IPO will indeed be one of India’s largest, second only to the Life Insurance Corporation of India’s $2.5 billion offering in 2022.
In other words, Hyundai’s IPO can potentially surpass the 2022 LIC IPO of Rs.21,000 crore.
This potential valuation not only reflects Hyundai’s market strength but also sets a significant benchmark in the Indian stock market, attracting substantial investor interest.
2. Hyundai Parent Company Selling 17.5% Stake
You know, Hyundai’s IPO is quite unique. Instead of issuing new shares, Hyundai’s parent company in South Korea plans to sell up to 17.5% of its stake in its Indian subsidiary. This means that current shareholders are reducing their stake via an “offer for sale” method. It could raise around USD 3 billion i.e. Rs.25,000 crore!
In numbers, Hyundai Motor plans to sell up to 14.2 crore equity shares out of a total of 81.22 crore shares, as per the SEBI filing. By selling existing shares, Hyundai aims to attract both retail and institutional investors without diluting the existing share pool.
This is intriguing because it shows confidence from the parent company, suggesting they believe in the strong value and future growth of their Indian operations without needing to dilute existing shares.
3. Electrification Plans
Increasing market share in the growing EV segment is a top priority. (Note: We have already explained this part in detail here- EV race in India.) The company has laid out an ambitious 10-year investment plan to expand its EV range and enhance existing car and SUV platforms. By 2030, Hyundai aims to produce five EV models and increase its EV charging stations to 485.
This move aligns perfectly with global trends towards electrification and sustainability. For potential investors, this focus on EVs represents a forward-thinking strategy that could yield significant returns as the EV market continues to grow.
4. Market Position
Hyundai is currently India’s second-largest carmaker by sales, holding a market share of 15% of the 4.2 million passenger vehicles sold in the country in FY24. It competes with industry giants like Maruti Suzuki, Tata Motors, and Mahindra & Mahindra in the Indian market. This strong market position showcases Hyundai’s ability to meet consumer needs and preferences effectively.
When a company holds such a significant share of a massive market, it indicates stability and growth potential, making it an attractive prospect for investors.
5. New Manufacturing Facility
To further bolster its production capabilities, Hyundai is planning to set up a new manufacturing facility in Andhra Pradesh with an annual capacity of 300,000 units. This facility will help the company increase its production and reduce dependence on its existing plant in Chennai. For you, this means that Hyundai is not just resting on its laurels; it’s actively expanding and preparing for future demand.
The new facility will likely streamline operations and enhance production efficiency, which could translate into better financial performance and potentially higher returns for shareholders.
Final Thoughts on Hyundai IPO
There you go! The Hyundai IPO is a monumental event in the Indian financial landscape. By selling a significant portion of its stake, Hyundai is all ready to enhance its market presence, attract a broad spectrum of investors, and generate substantial funds for future growth.
With robust financials, a strategic expansion plan, and an expertly managed offering, Hyundai’s IPO is definitely one to watch.
Whether you’re an institutional investor or a retail individual, this IPO offers a golden opportunity to be part of Hyundai’s exciting journey in the Indian automotive sector!
