Hyundai Motors India IPO - Biggest IPO so far!

Hyundai Motor India Limited is the country's second-largest passenger carmaker and is preparing to storm the Indian stock market with its gigantic Initial Public Offering, or IPO. Trends seem to indicate that this one would be one of the biggest witnessed in the country. All you need to know about this exciting development and why it matters for investors and car enthusiasts alike.

South Korea's Hyundai Motor Company (HMC) subsidiary Hyundai Motor India recently filed a Draft Red Herring Prospectus (DRHP) of rupees 25000 cr. with the Securities and Exchange Board of India (SEBI). In other words, this is a step toward listing on Indian stock exchanges. The IPO date, however, has not been declared, and sources indicate that it might enter the market as early as possible. Are you excited?

It's going to be an Offer for Sale (OFS), where HMC will sell 142.2 million equity shares representing 17.5% of its holding in HMIL. So, if you were waiting to get some piece of Hyundai, then here it is!

Talk numbers, they are humongous! Estimates by Nomura say that the IPO will fetch around ₹2,500-3,000 crore to the parent company of Hyundai. If these are to be true then HMIL will lead out with the biggest IPO ever in India leaving LIC of India in 2022 for its ₹21,000 crore IPO. Now, that's some serious money indeed! 

What Does This Mean for Hyundai India?

Proceeds from the IPO will flow into Hyundai's mother entity, HMC. However, in the long run, all the benefits of this IPO will be to HMIL. How? By listing on the stock market, HMIL can raise funds easily in the future for growth and expansion, including capex, without depending on its Korean parent. This, according to analysts at Nomura, will lighten the capex and investment burden for HMC while at the same time making it easier for HMIL to expand its footprint in India, especially in the electric vehicle space.

Why should investors pay attention?

So what's the hype surrounding Hyundai's IPO? Here's why:

• Premium Brand Image: The company's policy to provide sophisticated technologies along with diversified vehicle models has facilitated it to price competitively.
• Strong Market Share: Hyundai enjoys 14.6% market share of passenger cars in India after Maruti Suzuki at 41.7%, followed by Tata Motors at 13.9%.
• Future growth prospects: HMIL has entered the EV space and can raise further funds post-IPO to fund future growth prospects. This is one of the reasons that make it a good pick for long-term investors.

HYUNDAI MOTORS IPO DETAILS

Issue Size: 27,870 crore

Offer Date: Oct 15, 2024 - Oct 17, 2024

Issue Price: ₹1865-1960 per equity share

Market Lot: Retail : 7 Shares (₹13,720/-)
S-HNI : 105 Shares (₹2,05,800/-)
B-HNI : 511 Shares (₹10,01,560/-)

If you are an investor and aiming for access to part of India's booming auto industry, the Hyundai Motor India IPO would prove to be a golden opportunity. Known to be India's biggest-ever IPO, while all the earnings will be transferred to the parent company's money pool, this move puts Hyundai India ready for future growth and expansion-most particularly into the exciting electric vehicles market. Keep your peepers open for more intel as the IPO approaches since this is going to be big!

What's your take? Will you look to take a slice of Hyundai's action on the IPO front? Let us know!