Synopsis: Hyundai Motor India's ambitious IPO aims to raise significant capital, positioning it as a major milestone in India's financial market history. With substantial backing from top financial institutions and a strong market presence, HMIL is poised to make a significant impact on the stock market. The success of this IPO could further solidify Hyundai's position in India, enhancing its growth prospects and market share in the competitive automotive industry.
Hyundai Motor India Ltd. (HMIL) is planning a landmark initial public offering (IPO) to raise between $2.5 billion and $3 billion. The IPO will involve selling up to 142.2 million equity shares, representing 17.5% of its post-offer paid-up equity share capital, potentially making it the largest IPO in India's history, surpassing the Life Insurance Corporation of India’s $2.46 billion IPO in 2022.
Hyundai Motor India Looks to Raise $2.5 Billion in Potentially India's Largest IPO
Hyundai Motor India Ltd. (HMIL) is gearing up for a monumental initial public offering (IPO) that aims to raise between $2.5 billion and $3 billion. This ambitious move could make it the largest IPO in India's history, surpassing the previous record set by the Life Insurance Corporation of India’s $2.46 billion IPO in May 2022.
According to the draft red herring prospectus (DRHP), HMIL plans to sell up to 142.2 million equity shares, which represents 17.5% of its post-offer paid-up equity share capital. If successful, this IPO will value the company at between $25 billion and $30 billion.
Key Highlights of the IPO
Largest Potential IPO in Indian History: If Hyundai Motor India successfully raises the projected $2.5 billion to $3 billion, it will set a new record for the largest IPO in India, surpassing LIC's previous record.
Share Distribution: According to the DRHP, 35% of the total equity on offer will be available to retail individual investors.
Significance for Hyundai: This IPO is crucial not only for the investors but also for the company, as India is Hyundai's third-largest revenue generator after the US and South Korea. Aditya Kondawar, Partner at Complete Circle Capital, emphasized the importance of the Indian market for Hyundai, noting that SUVs, which make up over 62% of Hyundai’s domestic sales, are a key growth driver.
Market Leadership and Products: Hyundai Motor India has a strong market presence, particularly with its utility vehicles such as the Creta, Venue, and Exter, which accounted for approximately 60% of its total domestic sales in FY24.
Book-Running Lead Managers: The proposed IPO will be managed by a consortium of leading financial institutions, including Kotak Mahindra Capital Co Ltd, Citigroup Global Markets India Pvt. Ltd., HSBC Securities and Capital Markets (India) Pvt. Ltd., JP Morgan India Pvt. Ltd., and Morgan Stanley India Co. Pvt. Ltd.
Industry and Market Impact
Hyundai Motor India's planned IPO comes at a time when the automotive sector is recovering and evolving with new technologies and consumer preferences. The success of this IPO could signal robust investor confidence in the Indian automotive market and potentially pave the way for future IPOs in this sector.
