With a groundbreaking initial public offering (IPO) of ₹25,000 crore ($3 billion), Hyundai Motor India is poised to accelerate the pace of the Indian stock market. A huge event in recent times, the much-awaited initial public offering (IPO) is expected to eclipse even Life Insurance Corporation’s (LIC) massive ₹21,000-crore ($2.7 billion) IPO in 2022. The IPO is generating excitement not only in the automotive industry but also in the investment world at large, with Hyundai’s Indian unit valued at about $19 billion. Investors won’t want to miss this journey, so fasten your seatbelt!
Credits: Reuters
IPO Fast Facts: A Glimpse Under the Hood
Hyundai Motor India’s IPO will take off next week, opening to institutional investors on October 14, 2024, followed by ordinary investors from October 15 to 17. The initial public offering (IPO) price range is planned at between ₹1,865 and ₹1,960 per share. With an estimated top end valuation of $19 billion, Hyundai Motor India is likely to be the largest auto industry offering in India since Maruti Suzuki’s 2003 IPO.
Hyundai Motor’s parent company in South Korea is selling up to 17.5% of its share in the Indian branch through an Offer for Sale (OFS) process. Since there aren’t any new shares being offered, the ₹25,000 crore collected from the IPO will go straight to the parent company. Post-IPO, Hyundai Motor will still hold a commanding 82.5% stake in its Indian subsidiary, ensuring it maintains a strong grip on one of its most important global markets.
A Historic Moment for the Auto Sector
This IPO isn’t just about large numbers—it’s about the growth of India’s auto sector. Recognized for its popular models such as the Creta, Venue, and i20, Hyundai Motor India has been a household name for a long time. It is the second largest manufacturer in the country, after Maruti Suzuki.
The public offering of Hyundai Motor India will really be the largest in the history of the Indian auto industry, creating a new standard for the sector. There’s a noticeable buzz in the market.
Credits: Mint
Timing is Everything: Riding the IPO Wave
In the world of IPOs, timing is everything, and Hyundai Motor India appears to have got it just right. The Indian stock markets have been rising steadily, frequently reaching all-time highs. An obvious sign of optimistic investor mood is the broad spike in IPO activity across all industries. This ideal storm of favorable market conditions, along with Hyundai’s dominance in the Indian auto industry, makes the IPO debut particularly appropriate.
Indian institutional and retail investors are eager to seize this chance. Hyundai makes a strong case for long-term growth thanks to its innovative products, track record of success, and forward-thinking outlook. The carmaker solidified its strong foundation by becoming India’s second-largest automobile manufacturer in FY24 alone.
Parent Power: Hyundai’s Global Success Boosts Confidence
Why is there optimism surrounding Hyundai’s Indian IPO? Some hints can be found in Hyundai Motor’s outstanding success on the Korean stock exchange. Hyundai’s share price has increased by more than 34% in the last year, greatly outpacing the KOSPI index, which has only increased by about 10%. Hyundai’s robust global performance demonstrates the robustness of the brand, presenting the Indian unit’s IPO as a dependable investment opportunity for stakeholders.
It is clear that Hyundai Motor India is well-positioned for success when a parent business achieves such impressive growth on the international scene. There is plenty cause for investors to be hopeful about the Indian IPO, thanks to this strong international backing.
What’s in It for Hyundai Motor India?
In addition to providing a cash windfall, Hyundai Motor India’s IPO will increase its profile and brand recognition in the home market. More than just liquidity, a public listing improves a company’s market awareness, fosters greater shareholder participation, and makes it easier for it to draw in talent and resources.
As electric and hybrid vehicles gain popularity, Hyundai will have greater options going forward for future innovations and market expansion in India thanks to this step. The IPO opens up new opportunities for Hyundai’s future expansion in India, one of the most dynamic automotive markets in the world, even if no new cash will be directed directly into operations.
