LOOK: Everything you need to know about Hyundai Motor’s IPO

hyundai motors IPO :Hyundai Motor India is all set to create history with its long-awaited initial public offering ( IPO ), marking the first time an automaker has gone public in India since suzuki maruti Debut in 2003.

The offering is expected to raise up to Rs 27.87 billion, making it potentially the largest IPO in the history of India and the second largest globally in 2024.

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Key details of the IPO

Issue dates:Retail investors and other investors can place orders between October 15 and 17.

Price band:The shares are priced between Rs 1,865 and Rs 1,960.

Offer structure:He IPO is entirely an Offer for Sale (OFS), in which Hyundai Motor Group, the South Korean parent company, reduces its stake in Hyundai Motor India from 100 per cent to 82.5 per cent. In an SFO, existing shareholders sell their shares to the public and no new shares are issued. Therefore, the proceeds will go to the selling shareholders, not the company.

Key investors and demand

Anchor investors including BlackRock and Singapore’s sovereign wealth fund have already invested Rs 8,315 crore, indicating strong demand ahead of the public offering.

Hyundai financial performance

Hyundai Motor India’s financial performance has been strong despite challenges in the automotive sector. For the quarter ended June 30, 2024, the company posted revenue of Rs 17,567.98 crore and net profit of Rs 1,489.65 crore. Over the past two years, its revenue has grown at a compound annual growth rate (CAGR) of 21 percent, and profits are up 45 percent.

Hyundai has a 15 percent market share in India, second only to suzuki maruti and is betting on future growth through a strong SUV lineup and expansion into electric vehicles (EV), including the planned launch of the Creta EV in FY25. Additionally, the expansion of Talegaon facilities in Maharashtra will help to boost production capacity for both the national and export markets.

Wider implications for the automotive sector

hyundai IPO It comes at a time of strong growth in India’s automotive sector, but also amid challenges such as rising raw material costs and changing consumer preferences.

Despite these pressures, the company’s listing indicates confidence in India’s capital markets. More than $9 billion has already been raised through IPOs in 2024, indicating strong market appetite. Analysts believe Hyundai IPO It could encourage other automakers and large corporations to explore public listings.

Risks and competition

While Hyundai IPO has generated excitement, investors should consider the risks, including growing competition from players such as Tata Motors and new entrants such as Kia Motors. Additionally, Hyundai relies on its parent company for some components and pays a 3.5 percent royalty, which could hurt profits.

Analyst Ratings and Outlook

He IPO has been rated a “Long-Term Subscribe” by analysts, who find its competitive pricing attractive. Hyundai’s strong financials, growing market share and ambitious plans in the electric vehicle space position it as an attractive investment for long-term investors.

What’s next?

The allocation for Hyundai IPO It is expected to close on October 18, and the company’s shares are expected to trade on October 22. Investors and industry watchers alike will closely monitor Hyundai’s stock performance post-listing as it could set a benchmark for future IPOs in the automotive sector and broader corporate landscape.

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