Hyundai India IPO: Hyundai Motor India plans to sell 175 stake for up to 3 billion
Hyundai Motor India Limited (HMIL) is planning to dilute about its 17.5 per cent stake through an initial public offering (IPO) in a bid to raise to $3 billion (around Rs 25,000 crore), said people privy to the development on Friday.
India is the first market, besides South Korea, where any arm of the automaker is getting listed. If successful, its IPO proceeds will surpass Life Insurance Corporation’s (LIC’s) Rs 21,000 crore share sale, setting a new Indian record.
This event would also be a significant milestone for the Indian automotive sector, as it shall be the first IPO by a car manufacturer since Maruti Suzuki’s listing in 2003. HMIL, the second-largest carmaker in India after Maruti Suzuki, according to the sources, plans to sell approximately 140 million of its total 800 million shares. HMIL did not respond to Business Standard’s request for a statement on this matter.
The South Korean automaker’s Indian arm had around Rs 17,741 crore in cash and garnered a profit after tax (PAT) of approximately Rs 4,654 crore on a revenue of around Rs 59,761 crore in FY23, according to data from Capitaline.
The company’s PAT doubled in five years, from Rs 2,124 crore in FY18, despite a decline during the pandemic year of FY21 (Rs 1,847 crore).
HMIL’s investment plans include Rs 6,000 crore for the newly-acquired plant from General Motors in Talegaon and Rs 26,000 crore in Tamil Nadu over the next 10 years to expand production, develop a components ecosystem, electric vehicle manufacturing, charging infrastructure, and skill development.
In 2023-24, HMIL sold 614,717 passenger vehicles in India, achieving 8.3 per cent year-on-year growth, according to Society of Indian Automobile Manufacturers (Siam) data. With a 14.6 per cent share of the domestic market, the South Korean carmaker is the second-largest player in India, following Maruti Suzuki, which held a 41.7 per cent market share in FY24.
In January this year, CRISIL gave HMIL’s long-term debt a top rating of AAA.
“HMIL’s established presence in the domestic PV market is underpinned by the strong position of the Grand i10 Nios, Aura, and i20 in the compact car segment and Creta, Venue, Alcazar and Tucson in the SUV segment,” it mentioned.
It further said: “HMIL’s credit profile is expected to remain stable over the medium term, backed by its healthy and established market position in domestic and export markets PV markets, good demand for PVs, especially SUVs, good operating efficiencies. Its financial risk profile is also expected to remain robust, supported by healthy cash flow generating ability and solid liquidity position.”
First Published: Jun 14 2024 | 10:01 PM IST