Hyundai Motor India’s much-awaited Rs 25,000-crore initial public offering (IPO) is expected to open around mid-October, according to sources in the know. The price band for the IPO, set to be India’s largest, is expected to be between Rs 1,750 and Rs 1,760, market sources said.
Hyundai Motor India’s South Korean parent will be selling 142 million equity shares, representing a 17.5% stake in the carmaker. No less than 35% of the offer will be available for allocation to retail individual investors.
“The investor interest is pretty strong in the Hyundai IPO, given that its management is keen to keep the price band attractive. Hyundai also generates better margins and has a better average selling price than market leader Maruti Suzuki. This also plays well for investor interest,” a source told FE.
Hyundai Motor India is the country’s second-largest carmaker with a market share of 14.2% as of September end. The company has successfully transitioned from being a manufacturer of small cars like Santro, Eon and i10 to a maker of mid- and large sports utility vehicles (SUVs) such as Creta and Alcazar.
The average selling price of a Hyundai car during FY23 was Rs 8.37 lakh, while the same for Maruti Suzuki was Rs 6.13 lakh.
Hyundai may be a distant No. 2 in the pecking order in India, but it singularly generated more profit on every car sold than the combined profit generated by two of its top rivals.
During the nine months to December in FY24, at Rs 75,000, the net profit earned by Hyundai’s India subsidiary was 25% more than Maruti Suzuki at Rs 60,150.
Tata Motors, the third-largest carmaker, does not share net profit numbers for its passenger vehicle division, but it declared a before tax profit of Rs 21,300 per passenger car sold during the nine months.
More than half of Hyundai’s sales come from the SUV line-up, including models like Exter and Venue paving the way for higher margins. The company is now aggressively getting into the electric vehicle (EV) segment with a launch planned in 2025.
From 45% in FY21, the share of SUVs in Hyundai’s domestic pie jumped to nearly 63% by the end of December 31, 2023. The Hyundai Creta, the market leader in the mid-size SUV segment, is priced around Rs 10.99 lakh to Rs 20.44 lakh.
Hyundai has lined up Rs 32,000-crore in investments, which will be channelled for developing new technologies, capabilities and launching five new EVs by 2030.
India’s largest IPO to date was the Rs 21,000-crore public issue of Life Insurance Corporation (LIC) in May 2022. It followed the Rs 18,300-crore IPO of Paytm in November 2021.
