India is poised to witness its largest initial public offering (IPO) ever, as Hyundai Motor India prepares to enter the market. The company has secured approval from the Securities and Exchange Board of India (SEBI) for its substantial $3 billion IPO, valuing Hyundai at approximately $20 billion.
This is a significant moment, as it will mark the first time a car manufacturer has been listed in India in two decades, following Maruti Suzuki’s IPO in 2003. As investors prepare for this landmark event, let’s explore the Hyundai IPO and how HDFC Sky’s ‘One-Click IPO’ is revolutionising investment access.
Overview of Hyundai Motors India
Hyundai Motors India is a subsidiary of the Hyundai Motor Group, the world’s third-largest automotive OEM based on passenger vehicle sales in 2023. Since FY09, Hyundai has consistently held the position of the second-largest auto OEM in the Indian passenger vehicle market.
Renowned for manufacturing reliable, feature-rich four-wheelers powered by advanced technology, Hyundai’s portfolio comprises 13 models across various segments, including sedans, hatchbacks, SUVs, and EVs. Additionally, the company has been India’s largest exporter of passenger vehicles since FY05, with nearly 12 million vehicles sold domestically and internationally.
Moreover, having a demat account is essential for holding shares electronically, making buying and selling much easier
Important Dates Related to Hyundai IPO
| Event | Date |
| IPO Open Date | October 15, 2024 |
| IPO Close Date | October 17, 2024 |
| Basis of Allotment | October 18, 2024 |
| Initiation of Refunds | October 21, 2024 |
| Credit of Shares to Demat Accounts | October 21, 2024 |
| Listing Date (Tentative) | October 22, 2024 |
| Anchor Bid Date | October 14, 2024 |
Hyundai Motor IPO Offer Details
| Category | Details |
| Issue Type | Book Built Issue IPO |
| Face Value | ₹10 per share |
| Price Band | ₹1865 to ₹1960 per share |
| Total Issue Size | 14.22 crore shares (₹27,870.16 crore) |
| Offer for Sale | 14.22 crore shares |
| Employee Reservation | 778,400 shares (with a discount of ₹186) |
| Minimum Investment (Retail) | ₹13,720 (7 shares) |
Allocation and Reservation Details
The Hyundai Motor IPO is reserved for different categories of investors, with specific allocations for each group:
- Qualified Institutional Buyers (QIBs): Up to 50% of the net issue is reserved.
- Retail Investors: 35% of the net issue is allocated to retail participants.
- Non-Institutional Investors (NIIs): Also referred to as high-net-worth individuals (HNIs), 15% of the total issue is set aside for them.
- Employee Reservation: 778,400 shares are reserved for Hyundai employees, offered at a discount of ₹186 per share to the issue price. This encourages employee participation in the IPO.
Financial Performance
Hyundai Motors has demonstrated impressive financial growth in recent years. Below is a summary of its key financial metrics:
| Particulars | FY21 (₹ Crore) | FY22 (₹ Crore) | FY23 (₹ Crore) |
| Revenue | 40,972.25 | 47,378.43 | 60,307.58 |
| EBITDA | 4,245.66 | 5,486.09 | 7,548.78 |
| Profit | 1,881.16 | 2,901.59 | 4,709.25 |
Hyundai’s revenue has witnessed substantial double-digit growth, and the company has experienced a significant improvement in its profit margins, increasing from 4.54% in FY21 to 7.67% in FY23. The return on capital employed (ROCE) has also demonstrated strong performance, reaching 28.75% in FY23.
Areas of Service
Hyundai Motors excels in various manufacturing processes, ensuring high quality and efficiency in its operations. Their facilities include:
- Press Shop: A computer-controlled line that converts sheet metal into body panels with high precision.
- Body Shop: A state-of-the-art line that builds complete body shells.
- Paint Shop: Utilizes an eco-friendly water-based process for superior and durable exteriors.
- Assembly Shop: Where all engine and suspension parts are fitted into vehicles, followed by rigorous testing.
- Engine & Transmission Shop: One of India’s largest, equipped with advanced tooling and testing facilities.
SWOT Analysis of Hyundai Motors
Strengths
- Second-largest auto OEM in India and the leading exporter of passenger vehicles.
- Diverse portfolio catering to a wide range of customer preferences.
Weaknesses
- Dependence on a limited number of suppliers for parts and materials.
- Rising costs of parts and materials could affect profitability.
Opportunities
- Expanding passenger vehicle portfolio to meet growing consumer demand.
- Focus on increasing market share in the electric vehicle sector.
Threats
- Intense competition from domestic and international manufacturers.
- Changes in government policies could impact the automotive industry’s profitability.
Insights on the Hyundai IPO
Hyundai’s IPO is expected to launch in late 2024 or early 2025. The offering will primarily consist of an Offer for Sale (OFS), where the promoter-selling shareholder will sell up to 142,194,700 equity shares with a face value of ₹10 each. The aim is to increase market visibility and liquidity while establishing a public market for these shares. To invest in this IPO, you will need to open a demat account.
Investment Considerations
Investing in the Hyundai IPO can be an exciting opportunity. Here are a few tips to keep in mind:
- Research the Company: Familiarize yourself with Hyundai’s business model, product range, and market position.
- Monitor Financials: Keep an eye on the company’s financial statements to assess growth and profitability trends.
- Evaluate Market Conditions: Understand the current state of the stock market and economic environment, as these can impact your investment decisions.
- Open a Demat Account: Ensure you have a demat account set up before the IPO launches, as this will streamline the process of buying shares.
- Choose a Reliable Trading Platform: Selecting the best trading platform is vital for executing trades efficiently and managing your portfolio effectively.
How to apply for IPO using HDFC Sky’s One-Click feature
HDFC Sky’s One-Click IPO feature simplifies applying for IPOs, ensuring a smooth experience. Here’s how you can apply for the Hyundai IPO:
- Log into HDFC Sky: Access your account using your login credentials.
- Find the IPO section: Select “Indian Stocks” from your profile, then click on “IPO.”
- Select the Hyundai IPO: Locate the Hyundai IPO from the list and click “Apply Now.”
- Bid details: Enter your bid information and customise your application.
- Payment process: Choose UPI for your payment method.
- Approve the mandate: Use your UPI app to authorise the payment.
- Submit your application: Confirm and place your order to finalise your application.
HDFC Sky’s One-Click IPO features include:
- Effortless application: Apply in just one click, minimising documentation and errors.
- Instant notifications: Receive updates on your application status and refunds immediately.
- All-in-one management: Oversee all your IPO investments from a single platform.
- Flexible access: Apply from anywhere using the HDFC Sky app or portal.
The Hyundai IPO offers a compelling investment opportunity with both growth potential and stability. With HDFC Sky’s One-Click IPO feature, the investment process is simpler and more user-friendly. Don’t miss this chance to partake in this major event.