Hyundai Motor India Ltd. (HMIL), the Indian arm of South Korean auto major Hyundai, is getting ready to go public for the first time with an initial public offering of Rs 27,870 crore. The biggest Indian IPO open book, something its promoters describe as the “largest truly Indian IPO”-seeks to raise Rs 15,144 crore through an issue that opens for public subscription from October 15 to October 17. At Rs 21,000 crore, it was the largest in Indian history until LIC in 2022. This IPO will see further “Indianising” of Hyundai operations to strengthen its commitment to the Indian market, according to senior company officials. While Hyundai did report the biggest decline in domestic sales amongst all carmakers in FY20 due to the pandemic, it reported an impressive 35% growth in FY21 and 30% last fiscal.
This is why Hyundai is going public in India: Hyundai’s focus on becoming a trusted brand in India
One of the most important reasons why Hyundai is going public in India is the company’s growing focus on becoming a trusted brand within the country. As said by a senior official of the company, “India has become an important market for Hyundai, with the country’s robust economic growth and increasing consumer demand.”.
“If you see India as a country, it’s really doing very well. The GDP is much higher than the global GDP growth rates,” said the official. Accelerated growth over the last three to four years has made India an attractive destination for major global players, and Hyundai is one of them. According to the company, this is the right time to invite local and global investors to be a part of its growth story.
Timing and Strategic Significance of the IPO
Hyundai’s going public comes at a strategic time. Since it has expanded its automobile company’s operations to a new plant in Pune, having purchased the facilities from General Motors, this appears to be the perfect moment. Giving chances to local and global investors to join its success process is for Hyundai an enclave on its business operations.
“The Pune plant is also coming up, and this is the right time to give the opportunity to all investors to join the growth story,” said Garg, a senior Hyundai official. This will also help Hyundai pursue global standards in terms of excellence, governance, and operations, making the IPO a significant step in the company’s evolution.
Hyundai Motor Strong Market Position in India
From being a relatively small player three years back, Hyundai has now emerged as one of the most exciting companies in India today. Today, it stands as the second largest passenger vehicle manufacturer in India, next only to Maruti Suzuki. Hyundai has thus firmly established itself as a reliable and trusted player in the Indian automobile market. The company enjoys a double-digit market share because of its strong brand recognition.
“We are the number two player in India in passenger vehicles outside of South Korea, and we have a double-digit market share,” the official highlighted. That gives Hyundai enough confidence that the Indian market is an ideal platform for public listing.
IPO Price and Valuation
Hyundai announced that it would price its IPO between Rs 1,865 and Rs 1,960 per share. The valuation of the company at the upper end of the price band stands at Rs 1.6 lakh crore or about USD 19 billion. The IPO is to raise Rs 27,870 crore making it the biggest ever in the country.
Anchor investors will bid on 14th October, the day before the public subscription opens. The offerings now shall present an unmatchable opportunity to both Indian and International investors about the growth story of Hyundai, which is firmly anchored in its place as a fabric part of the Indian economy.
Conclusion: A Landmark Moment for Hyundai Motor and India
Hyundai’s IPO is not only a fund-raising proposition, it is the commitment towards the Indianisation of operations and the move towards making its business more inclusive. With a performing market, growing production base, and growing investor confidence, Hyundai is well set to further broaden its dominance in the Indian automotive sector. This is an important chapter in Hyundai’s growth story and is also pegged against India’s importance in the global automotive industry.
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