Hyundai Motor India files RHP, IPO to open on October 15 with offer for sale of 14.2 crore shares

Hyundai Motor India IPO

Hyundai Motor India, the subsidiary of South Korea's Hyundai Motor Company, has filed red herring prospectus with the Registrar of Companies on October 8. The initial public offering (IPO) will hit Dalal Street on October 15, solely comprising an offer-for-sale with no fresh issue component.

Promoter Hyundai Motor Company will be selling 14.2 crore equity shares in the offer-for-sale, as per the RHP. The price band will be announced on October 9.

The $3 billion public issue will open for institutional investors (anchor book) for a day on October 14. The last day for subscription to the IPO will be October 17.

Half of the net public issue size (the offer less employees' reservation) has been reserved for qualified institutional buyers, of which up to 60 percent may be allocated to anchor investors. Further, 15 percent shares are reserved for non-institutional investors, and the remainder 35 percent shares for retail investors.

The company has reserved up to 7,78,400 equity shares for its employees.

Hyundai Motor India has been the second largest car maker, after Maruti Suzuki, in the Indian passenger vehicles market since FY09 (in terms of domestic sales volumes), while it is the India’s second largest exporter of passenger vehicles since April 2021 till June 2024.

At the expected $3 billion issue size, it is likely to be the largest IPO in India, surpassing the record of $2.7 billion (Rs 21,000 crore) raised by the Life Insurance Corporation of India in 2022. Parent firm Hyundai Motor Company will hold 82.5 percent shareholding in the Indian unit post issue, as per the RHP.

Hyundai Motor India IPO is expected to get robust response from investors and is going to be the largest listing in the automobile sector in India since Maruti Suzuki India's debut in 2003.

"The pre-IPO market for the companies like Hyundai Motor India, Swiggy and NTPC Green Energy is all heated up with demands from mature investors. The public issue market is seeing a strong investor sentiment. We foresee bumper appetite for IPOs will continue," Divam Sharma, co-founder of Green Portfolio said.

The financial performance of the company has been strong, with net profit growing 12.1 percent year-on-year to Rs 1,489.6 crore for the quarter ended June 2024 with healthy operating numbers. EBITDA (earnings before interest, tax, depreciation and amortisation) for the June quarter grew by 17.2 percent to Rs 2,340.3 crore with margin expanding by 148 bps to 13.5 percent compared to same period last year.

Revenue during the first quarter of fiscal year 2025 stood at Rs 17,344.2 crore, increasing by 4.3 percent over Rs 16,623.5 crore in the corresponding period last fiscal, as per the draft papers.

For the fiscal year 2024, its net profit increased by 28.7 percent to Rs 6,060 crore compared to previous fiscal, and revenue stood at Rs 69,829 crore, growing 15.8 percent over the fiscal 2023. EBITDA for FY24 soared 21 percent to Rs 9,132.6 crore and margin increased by 58 bps to 13.08 compared to previous fiscal.

The automobile company will finalise the basis of allotment of Hyundai Motor India IPO shares by October 18 and the equity shares will be credited to demat accounts of successful investors by October 21.

The trading in Hyundai Motor India shares will commence on the BSE and NSE, effective October 22.

Parent Hyundai Motor Company shares corrected 8.2 percent on Korean Stock Exchange since the filing of draft red herring prospectus for the IPO by the Indian unit on June 14, 2023, but rallied 45 percent since November 2023.

The merchant bankers that handling Hyundai Motor India IPO are Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), JP Morgan India, and Morgan Stanley India Company. KFin Technologies is the registrar to the offer.