Hyundai IPO – Check Date, Price, GMP & Lot

Hyundai IPO – Check Date, Price, GMP & Lot.

Indian stock markets may soon witness their largest-ever IPO from a carmaker. With Hyundai planning to go public, it will be the first carmaker in the country to do so in two decades since Maruti Suzuki’s IPO in 2003. Hyundai is a South Korean car company, and its Indian subsidiary is planning a public listing that could be valued at $30 billion. Hyundai plans to raise up to $3 billion through this IPO.

Bankers have indicated that the IPO is likely to be launched in the next 4 to 6 months, subject to SEBI approval and market conditions.

Market position for Hyundai IPO

As the third-largest car manufacturer globally, India has Hyundai positioned as the second-largest car maker within the country. So, when a company like Hyundai announces for public offering, it’s worth taking note.

Hyundai’s India unit is preparing to go public by launching an Hyundai initial public offering (IPO), making its shares available to the public for the first time.

Fundraising and Investment Plans

A maximum of 50% of the shares issued will be reserved for qualified institutional buyers, 35% for retail investors, and 15% for non-institutional investors.

• Hyundai’s South Korean parent plans to sell up to 142 million shares (a 17.5% stake) in the Indian subsidiary.
• The funds raised will range between $2.5 to $3 billion.
• Hyundai has committed $5 billion to investments in India and intends to invest an additional $4 billion over the next decade.
• The funds raised are expected to fuel the next phase of expansion, including premiumization (selling more expensive cars), electric vehicles, and car exports from India.

Records might break in Hyundai IPO

The listing could also set some records. Hyundai’s IPO could be the largest India has seen yet. The last major IPO in India was in 2022 by the state-owned Life Insurance Corporation of India (LIC), which raised $2.45 billion. Since 2021, we have seen a lot of new listings, with brands like Zomato, Paytm, Nykaa, and PolicyBazaar going public. However, early investors in these companies have suffered losses.

Can Hyundai IPO break that trend? Well, the numbers are in its favor, but Hyundai IPO faces a challenging market too.

Potential Benefits and Risks for Investors in Hyundai IPO

Benefits:

• Hyundai’s strong market leadership as the second-largest car maker in India, along with its successful SUV lineup, provides a solid foundation for continued growth.
• The company’s consistent revenue and profit growth further enhances its attractiveness as an investment.
• Hyundai’s substantial investments and modernization efforts highlight its enduring commitment to the Indian market.

Risks:

• Market volatility affects the IPO’s success, as it relies on favourable market conditions and broader economic factors that could influence its performance.
• Strong competition from other automakers, such as Maruti Suzuki and Tata Motors, could affect Hyundai’s market share and profitability.

Lead Manager and Registrar of the Hyundai’s IPO

The lead managers for the IPO are Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities and Capital Markets India, JP Morgan India, and Morgan Stanley India, while KFin Technologies is the registrar of the issue.

Competition and Market Dynamics for Hyundai IPO

India’s automotive market is expanding, with projections indicating it will reach a valuation of $300 billion by 2026. However, it is a highly competitive space, with at least 15 major players competing for a share of this market. Companies like Hyundai face tough competition from homegrown players such as Maruti Suzuki, Tata, and Mahindra. Major car companies like Ford, Fiat, and Chevrolet entered India with much hype but failed to gain a sizable presence and ultimately had to exit. In comparison, Hyundai now has considerable experience in India, having sold cars in the country for 28 years, which should give it confidence about its prospects.