Hyundai Motor India Pvt. Ltd. is all set to make an impact with its upcoming IPO. Recently, SEBI approved the Initial Public Offering (IPO). This IPO is reportedly the first from an automaker in over 20 years, following Maruti Suzuki’s listing in 2003. The car company aims to raise significant funds and boost its visibility in a competitive market through this offer-for-sale. The highlight of this move is Hyundai’s growth and the ongoing expansion of India’s automotive industry.
Details Of Hyundai IPO
- The proposed IPO consists of an offer-for-sale (OFS) of 142,194,700 equity shares by Hyundai Motor Company (promoter).
- Especially, there will be no fresh issue of shares in this IPO. It means that Hyundai will not receive any proceeds from the sale.
Financial Expectations
- The South Korean automaker aims to raise at least $3 billion through this IPO.
- It is looking to dilute 15-20% of its stake. This could raise funds in the range of $3.3 to $5.6 billion.
Background In India
- Hyundai Motor India began operations in India in 1996. Currently, it sells 13 models across various segments.
- Hyundai is the second-largest carmaker in India. It holds a market share of approximately 15%.
- Almost 25% of all Hyundai cars sold globally are purchased in India. It means one in four cars is bought by Indians.
Competitors
- The Indian automotive market is highly competitive. Primarily, if you see, it is dominated by Maruti Suzuki India Ltd.
- Reportedly, American carmakers such as Ford Motor Company and General Motors Co. have exited the Indian market after unsuccessful attempts to establish a significant foothold.
Market Presence Of Hyundai
- Hyundai has consistently recorded sales of about 60,000 units every month.
- Although recent months have shown a downturn in the entire industry.
- The company is planning to leverage the IPO to enhance visibility, improve the image of the brand, and provide liquidity in the public market for its shares.
Future Outlook
- The IPO is expected to launch as soon as October. Only if it gets pending regulatory approvals.
- If everything goes well, Hyundai Motor India’s value in the stock market could be about half of its parent company’s worth, which is around $47 billion.
- This listing could help strengthen its status as a key player in the Indian automotive sector.
Market Context
- Last month, Ola Electric Mobility successfully launched its IPO by raising Rs. 6,145 crores.
- This highlights the growing interest and activity in the Indian market for IPOs, especially in the automotive sector.
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