The IPO, which is a complete offer for sale (OFS) of 14.2 crore shares by the Korean parent, is priced in the range of Rs 1,865-1,960. At the upper end, the company is valued at Rs 1.6 lakh crore.
Two weeks ago, the share price of Hyundai in the unlisted market was around Rs 570. However, analysts noted that recent market corrections and somewhat expensive valuations are contributing to a 76% dip over the past two weeks.
“It is true that the GMP has declined significantly due to recent market corrections. While this might dampen the enthusiasm around the IPO in the short term, it does not necessarily reflect the long-term potential of Hyundai’s business,” said Abhishek Jain, Head of Research, Arihant Capital Markets.
This IPO will make Hyundai Motor India the first automaker to go public in two decades, following Maruti Suzuki’s listing in 2003.
Although the entire proceeds from the IPO will go to the parent company, management stated that the funds will be used for research and development as well as new innovative offerings.Hyundai is the second-largest carmaker in India, with a portfolio of 13 passenger vehicle models across sedans, hatchbacks, and SUVs. The company aims to leverage its strong local manufacturing capabilities to establish itself as Hyundai Motor’s largest production base in Asia.It operates two production facilities in Chennai with a combined installed capacity of 824,000 units per annum and is currently running at over 90% capacity utilization.
For the quarter ended June 2024, Hyundai Motor India reported a revenue of Rs 17,344 crore, an increase from Rs 16,624 crore in the same period last year. Of the total revenue, 76% was derived from the domestic market, while exports accounted for 24%.
The company’s net profit for the quarter was Rs 1,489.65 crore, compared to Rs 1,329.19 crore in the previous year.
Kotak Mahindra Capital, Citigroup Global, HSBC Securities, JP Morgan, and Morgan Stanley are the book-running lead managers for the issue, while KFin Technologies is the registrar for the offer.