The Business Profile of the Hyundai Motor India

The company is one of the largest passenger vehicle makers and the third largest auto original equipment manufacturer (“OEM”) in the world. In the Indian market since 2009, it is the second largest auto OEM in Indian passenger vehicles.

Currently company has around 13 models across multiple passenger vehicle segments by body type that consists of sedans (Aura and Verna), sports-utility vehicles (Exter, Venue, Venue N Line, Creta, Creta N Line, Alcazar, Tucson and IONIQ 5), hatchbacks(Grand i10 NIOS, i20 and i20 N Line), and battery electric vehicles (“EVs”).

Apart from making multiple passenger vehicles, the company also manufactures auto parts such as transmissions and engines. The company also export passenger vehicles manufactured in India and is an exporter of one of the highest cumulative numbers of passenger vehicles for the same period. From 1998 to the year 2024, the company has sold around 12 million passenger vehicles in India and exported.

Its main old Manufacturing plant in Chennai can produce 824,000 vehicles annually. The company acquired another manufacturing plant at Talegaon that will be partly in the second half of Fiscal 2026. Once it is fully operational, the total production capacity of the company will cross more than 1 million units per year.

The company has 366 sales outlets located across 1,031 cities and 1,550 service centers situated in 962 cities and towns across India providing widespread dealers and service networks to its customers.

The Main Objectives to Launch the Hyundai Motor India IPO

As per the draft red hearing prospects, the entire issue will be offered for sale by the promoter of the company. One of the main objectives of the company is to list on the bourses and also give the option to sell some of the stakes in the company.

The listing on the exchange also improves the brand image and visibility o the company, side by side unlocking value of the company by providing the liquidity and public market for the Equity Shares in India.

IPO Details of Hyundai Motor India:

Hyundai Motor India IPO Issue Price & Size

The issue price of Hyundai Motor India has been set for Rs. 1865 to 1960. The company has an OFS of 142,194,700 equity shares.

Launch Date of Hyundai Motor India IPO

The IPO of this company is launching on October 15, 2024, hence the opening date for bidding is October 15, 2024 and the IPO is closing on October 17, 2024. Investors can bid in this IPO between these days during the primary market hours.

Hyundai Motor India Financial Statements

Source: DRHP

Hyundai Motor India Financial Performance

Revenue from operation from domestic market has witnesses a marginal downfall, from 81.21% in 2021 to 76.34 as of Dec, 2023. Total sales volume from domestic marker rose from 471,535 in 2021, to 454,404 in Dec 2023.

Yearly net profit margin has been on a rise from 2021. Net profit margin were 4.54 in  2021, which rose to 8.22 as of Dec 0223.

Sales outlet as well as service outlet has seen a rise over the years. Number of sales outlet has increase from 1167 in 221, to 1366 in Dec, 2023. Whereas, number of service outlets increase from 1307 to 1550 as of Dec 23.

Hyundai Motor India Promoters & Shareholding

There is only one promoter of the company, i.e. Hyundai Motor Company. The promoter company hold 100% stake at the time of Filing the DRHP.

Source: DRHP

Should You Subscribe to Hyundai Motor India IPO or Not

While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.

Strengths of the Company:

• According to the CRISIL Report, in terms of domestic sales volume, since 2009, Hyundai Motor India has been the second largest auto OEM in the Indian passenger vehicles market in India.
• The company is having a diverse portfolio of passenger vehicles across powertrains and major passenger vehicle segments including sedans, hatchbacks, SUVs and electric vehicles.
• To cover the widespread market in India, the company has situated 1,366 sales outlets in 1,031 cities and towns in India with 1,550 service centres across 962cities and towns in India.
• To meet the demands of its customers, the company has established highly flexible and automated manufacturing capabilities at its manufacturing plants in India.
• The company has the ability to identify emerging market trends in a timely manner and introduce innovative passenger vehicles and technologies to meet customer needs in India.
• Further, as part of its growth strategy, the company is leveraging its deep understanding of consumer preferences to successfully expand the passenger vehicle portfolio.
• To expand its product portfolio, the company is also looking to expand its capacity expansion from its current annual production of 824,000 units to 1,074,000 units per year in the coming years.
• As per the shift or change in demand from fuel-based engines to electric-based vehicles in the automobile industry, especially in passenger vehicles, Hyundai is also looking to expand its market share in this segment with the launch of more EV vehicles at more affordable prices.
• To provide a faceable recharging solution to its customers for EVs, the company has also aimed to develop the EV infrastructure in India by constructing charging stations.
• While considering the scope of demand from overseas countries, the company is also looking to further strengthen its position as the export hub with the largest foreign production base in Asia.
• At the financial end, the company has registered healthy CAGR growth in revenue, EBITDA and net profit with improved EBITDA and net profit margins in the last three years.

Also Read:  Risk Factors involved in Applying for an IPO

Risk Factors of the Company:

• The company is the second largest passenger vehicle in India after Maruti Suzuki, and its other nearest like Tata Motors, M&M and Kia Motors are also gaining the market share in various segments of passenger vehicles creating stiff competition for the company.
• Hyundai Motor India is a wholly-owned subsidiary of Hyundai Motor Company and also has stakes in Kia Corporation which is the parent company of Kia India Private Limited and is also in the same line of business. Hence any kind of conflict of interest between these groups of companies could adversely impact the business of the company.
• Currently company is manufacturing its passenger vehicles and parts only at the Chennai Manufacturing Plant which accounts major revenue of the company. Any kind of technical problem, interruption or work stoppage at the manufacturing plants can affect the business operations of the company and will also affect the financial performance of the company.
• The demand for Electric Vehicles (EVs) is increasing, hence adaptation of this new technology-based vehicle and gaining the market share in coming years is another challenge for the company. Any failure to recognize such a market trend could adversely affect its business.
• The automobile industry is also much regulated, and now the government is trying to ban diesel engine-based passenger vehicles and emphasizing CNG and EVs to reduce carbon emissions. Hence, any kind of elimination, reduction in incentives or impositions by the government will affect business operations and the financial performance of the company.
• The promoter of the company and one of the subsidiaries are facing legal proceedings and any unfavourable outcome by the courts in any of these proceedings will impact the business operations and also affect the reputation of the company.

Hyundai Motor India IPO Review & Analysis

The issue price of this IPO is not yet disclosed, hence reviewing and comparing the share price valuation with nearest rivals is not possible right now. However, as per the latest financial results in the last nine months Dec ended 2023, the earnings per share (EPS) of the company stood at Rs 53.94 per share. Based on these nine months, we expect the full-year EPS of the company would be around Rs 70 which you can use to calculate the price-to-earnings ratio (P/E) of the company.

And based on their TTM EPS, their listed peers like Maruti Suzuki India, Tata Motors and M&M are trading at P/E of around 28x, 11x and 30x respectively. If the issue price of this IPO is launched at a higher price evaluating the shares expensive than the average of these peer companies then you can avoid subscribing to this IPO. On the other hand, if this IPO is launched at a lower price valuating the share price of this company at a lower P/E than its peer, then you can subscribe for the issue.

How to Apply in Hyundai Motor India IPO?

To apply for the Hyundai Motor India IPO or invest in any listed company in India, you must have a demat account and trading account. Once you have both these accounts you can apply for IPOs in the primary market or buy shares directly from the secondary market through the trading platform provided by the discount brokers or full-service brokers to their clients.

Also Read: Choosing the right broker: Decoding the mystery of lowest brokerage charges

Here you can choose Moneysukh to open demat and trading account to apply for the IPO. You will get the best online trading platform to invest or trade in equities, commodities and the forex market or apply in the IPOs. To apply for this IPO through Moneysukh follow the steps given below.

Also Read: What are the Benefits of Demat Account: Advantages & Why you need it

Steps to Apply for Hyundai Motor India IPO:

Step 1:Once the IPO opens you can apply.

Step 2:Open trade.moneysukh.com and log in with your User ID & password.

Step 3:Now find the IPO section and select the Hyundai Motor India IPO.

Step 4:Here you have to fill in various details like price, quantity, and so on.

Note: At the time of applying for any IPO, always bid at the cutoff price before submitting your application. 

Step 5: Now make the required payment and submit your IPO application.

Also Read: What to Check Before Buying IPO: Things to Know & Is it Safe

How to Check the Allotment Status of Hyundai Motor India IPO?

The allotment of shares in the IPO is organized after a few days of closing of bidding. Once the allotment date arrives, you can check the allotment status through various online sources like NSE, and BSE and through the website of Moneysukh using your PAN or IPO application details.

Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh

The allotment of shares in the IPOs is highly dependent on the oversubscribe status of the IPOs. Hence, if it is oversubscribed many times, there are less chances of allotment to everyone.

Also Read: How Shares are Allotted in Oversubscribed IPO: Allocation Process

However, if you have been allotted any share in this IPO cit will be credited into your demat account on the date of listing that you can sell in the secondary market.  And if there is no allotment of shares in this IPO, then your application money will be refunded into your bank account or the fund will be unblocked if you have applied through ASBA.

Also Read: How to Increase the Chances of IPO Allotment