Hyundai Motor India Limited (HMIL) is set to launch one of the largest Initial Public Offerings (IPOs) in Indian history. This landmark event not only marks a significant milestone for the company but also presents a valuable opportunity for investors seeking to diversify their portfolios. The Hyundai IPO aims to raise ₹25,000 crores (approximately $3 billion), valuing the company at approximately ₹1.5 lakh crores.
This is a prime time to explore this venture and understand its potential impact on the stock market, particularly for those interested in the history of the stock market.
Let’s take an in-depth look at the Hyundai IPO and the ‘One-Click IPO’ feature by HDFC Sky to ease investments.
Understanding the Hyundai IPO
Hyundai is selling approximately 17% of its stake in its Indian subsidiary, reflecting its confidence in the continued growth of the Indian market. Unlike many other major IPOs, this one does not reserve shares for employees. The shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), making them accessible to a wider range of investors.
The anticipated IPO has set its price band between ₹1,865 and ₹1,960 per share. Investors can place bids for a minimum of 7 equity shares, with additional bids available in multiples of 7 shares.
Key Details of the IPO
- Total Equity Shares: 142.2 million shares
- Price Per Share: ₹10 (final price will be decided through a book-building process)
- Allocation:
- 50% for Qualified Institutional Buyers (QIBs)
- 35% for retail individual investors
- 15% for non-institutional investors
This structured offer aims to attract diverse investors and ensure a competitive price for the shares.
Hyundai Motor India IPO Date
As per the offer document submitted to SEBI, the Hyundai Motor India IPO will open on 15 October 2024 and close on 17 October 2024. Following this, investors will receive updates regarding their allotment status on 18 October 2024.
For those who are allotted shares, they can expect them to be credited to their demat accounts by 21st October 2024. The shares will officially be listed on the stock exchanges, NSE and BSE, on 22nd October 2024.
To participate in the Hyundai IPO, potential investors should first open a demat account online. This account is essential for holding shares in electronic format, making the process of buying and selling shares much simpler. Many financial institutions and trading platforms offer easy procedures for setting up a demat account.
Why is Hyundai Going Public?
Hyundai’s decision to launch this IPO is driven by several strategic reasons. The company aims to address the ‘Korea Discount,’ a term that refers to the lower valuations of South Korean firms compared to global counterparts.
By listing its Indian operations, Hyundai seeks to enhance its brand visibility and improve its valuation. Additionally, Hyundai has made significant investments in its Indian operations, making this IPO an opportunity to unlock value and attract more investment.
Financial Performance of Hyundai
Hyundai’s financials showcase a solid performance over the years. Below is a summary of the key financial metrics from FY2023:
| Metric | FY 2023 (₹ Million) | FY 2022 (₹ Million) | FY 2021 (₹ Million) |
| Revenue from Operations | 603,075.80 | 473,784.32 | 409,722.51 |
| Profit for the Year | 47,092.50 | 29,015.91 | 18,811.56 |
| EBITDA | 75,487.80 | 54,860.89 | 42,456.61 |
| Net Worth | 200,548.18 | 168,562.55 | 153,113.43 |
| ROCE | 28.75% | 20.37% | 15.38% |
Strengths of Hyundai
Market Leadership: Hyundai stands as a dominant player in the Indian automotive sector, holding a significant market share and offering a diverse range of vehicles that cater to various consumer preferences. Its innovative models consistently attract buyers, further solidifying its position in the market.
Technological Innovation: Hyundai continually invests in research and development, integrating advanced technology and unique features into its vehicles. This focus on innovation enhances driving experiences and appeals to tech-savvy consumers, making Hyundai a preferred choice among modern car buyers.
Strong Distribution Network: The company boasts a robust distribution network across India, ensuring that its vehicles are readily available to customers. This extensive reach is complemented by excellent after-sales service, which enhances customer satisfaction and loyalty.
Brand Reputation: Over the years, Hyundai has cultivated a strong brand reputation through its commitment to quality and exceptional customer service. This dedication has earned the trust of consumers, positioning Hyundai as a reliable and reputable automobile manufacturer in India.
Risks to Consider
While the Hyundai IPO presents an attractive opportunity, investors should also be aware of certain risks:
Intense Competition: The Indian automotive market is fiercely competitive, with numerous established players and new entrants vying for market share. This landscape presents challenges for Hyundai, as it must continuously innovate and adapt to maintain its position.
Economic Sensitivity: The automotive sector is closely tied to the broader economy. Any economic downturn can significantly impact consumer confidence and spending, potentially reducing Hyundai’s vehicle sales.
Regulatory Challenges: Manufacturers like Hyundai face evolving regulatory frameworks, particularly concerning environmental standards. Compliance with stricter regulations can result in increased production costs, which may affect profitability.
Currency Fluctuations: Being a subsidiary of a South Korean parent company, Hyundai is subject to currency risk. Fluctuations in exchange rates can impact costs, especially for imported components and raw materials, affecting overall financial performance.
How to Participate in the IPO?
Hyundai’s IPO represents a significant event in the Indian stock market landscape. With its solid financial performance, strong market position, and growth potential, Hyundai Motor India Limited is poised to attract considerable investor interest.
By understanding the details of the IPO and preparing adequately, investors can seize this opportunity to invest in one of India’s leading automobile manufacturers. As the company prepares to enter the stock market, it is an exciting time for both Hyundai and potential investors.
Once the account is set up, investors can use a trading app to apply for the IPO. These apps provide user-friendly interfaces and comprehensive resources, allowing investors to make informed decisions and manage their portfolios efficiently.
How to Apply for Hyundai’s IPO using HDFC Sky’s One-Click IPO
HDFC Sky’s One-Click IPO feature makes applying for an IPO simpler, providing a seamless experience. Here’s how you can apply for the Hyundai IPO using this feature:
- Login to HDFC Sky: Use your credentials to access your HDFC Sky account.
- Go to IPO section: From your profile, choose “Indian Stocks,” then select “IPO.”
- Select the IPO: Locate the Hyundai IPO in the list and click “Apply Now.”
- Enter bid and details: Input your bid and customise your application.
- Proceed with payment: Opt for UPI as the payment method.
- Approve the mandate: Open your UPI app to authorise the payment mandate.
- Confirm and submit: Complete your application by confirming and placing your order.
Key benefits of HDFC Sky’s One-Click IPO:
- Easy application: Submit your IPO application with just one click, reducing paperwork and minimising errors.
- Instant updates: Receive notifications on your application status, allotments, and refunds in real-time.
- Centralised management: Handle all your IPO applications from one integrated platform.
- Flexibility: Apply via the HDFC Sky mobile app or portal from anywhere.
Hyundai’s IPO is an exciting investment, combining growth and stability. With HDFC Sky’s One-Click IPO, this opportunity becomes easier and more accessible, allowing investors to engage in the IPO in a streamlined way.
