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Hyundai Motor India IPO: Things Smart Investors Need to Know

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Incorporated in May 1996, Hyundai Motor India Limited (HMIL) is part of the globally renowned Hyundai Motor Group, which is the third-largest auto original equipment manufacturer (OEM) worldwide based on passenger vehicle sales. HMIL is known for producing reliable, feature-rich, and innovative four-wheeler passenger vehicles backed by the latest technology. The company’s product portfolio includes sedans, hatchbacks, SUVs, and electric vehicles (EVs), along with key components like transmissions and engines.

Core Business and Market Position

Hyundai Motor India is a prominent player in the Indian automobile industry, offering mobility solutions through a vast network of 1,366 sales points and 1,550 service points across the country. By March 31, 2024, HMIL had sold nearly 12 million passenger vehicles, including models like the Grand i10 NIOS, i20, Verna, Creta, and the all-electric SUV Ioniq 5. The company operates a state-of-the-art manufacturing plant near Chennai, producing vehicles for both domestic and international markets, including Africa, the Middle East, and South Asia.

Hyundai Motor India IPO Details and Objectives

The Hyundai Motor India IPO is designed to raise capital for various strategic objectives. The company plans to utilize the funds to expand its manufacturing capacity, invest in research and development, and meet working capital requirements.

Purpose of the IPO

The Hyundai Motor India IPO is a book-built issue valued at ₹27,870.16 crores, structured entirely as an offer for sale of 14.22 crore shares. The company itself will not receive any proceeds from this offering. Instead, all proceeds will go to the Promoter Selling Shareholder, after accounting for offer-related expenses and applicable taxes. The IPO will not be utilized for business expansion, but it provides an opportunity for existing shareholders to divest their holdings.

Expected Funds to be Raised

Hyundai Motor India's IPO aims to raise ₹27,870.16 crores through the offer for sale. As the proceeds will be directed to the Promoter Selling Shareholder, the company will not be using these funds for growth or operations.

Key Dates to Remember

  • IPO Open Date: Tuesday, October 15, 2024

  • IPO Close Date: Thursday, October 17, 2024

  • Basis of Allotment: Friday, October 18, 2024

  • Initiation of Refunds: Monday, October 21, 2024

  • Credit of Shares to Demat: Monday, October 21, 2024

  • Listing Date: Tuesday, October 22, 2024

  • Cut-off time for UPI mandate confirmation: 5 PM on October 17, 2024

Pricing and Lot Size of Hyundai Motor India IPO

  • IPO Date: October 15, 2024, to October 17, 2024

  • Face Value: ₹10 per share

  • Price Band: ₹1,865 to ₹1,960 per share

  • Lot Size: 7 shares

  • Total Issue Size: 142,194,700 shares, aggregating up to ₹27,870.16 crores

  • Offer for Sale: 142,194,700 shares of ₹10, aggregating up to ₹27,870.16 crores

  • Employee Discount: ₹186 per share

  • Issue Type: Book Built Issue IPO

  • Listing At: BSE and NSE

  • Pre-Issue Shareholding: 812,541,100 shares

  • Post-Issue Shareholding: 812,541,100 shares

  • Listing Date: Tuesday, October 22, 2024

How to Apply for the Hyundai Motor India IPO?

To apply for the Hyundai Motor India IPO, follow these simple steps:

  • Online Application Process:

    1. Login to your Bajaj Broking demat account app/web.

    2. Go to the IPO section and search for Hyundai Motor India.

    3. Enter the bid details and submit the application.

For detailed steps, you can refer to your broker’s IPO application guide.

Financial Health and Performance

  • Assets:
    Hyundai Motor India’s total assets have fluctuated over the years. As of June 30, 2024, the company reported assets worth ₹25,370.24 crores, which shows a slight decrease from ₹26,349.25 crores as of March 31, 2024. The highest asset value was recorded on March 31, 2023, at ₹34,573.34 crores, while in March 2022, it stood at ₹28,358.06 crores.

  • Revenue:
    Hyundai’s revenue has shown significant growth over the years. For the quarter ending June 30, 2024, revenue was ₹17,567.98 crores. The total revenue for the financial year ending March 31, 2024, was ₹71,302.33 crores, up from ₹61,436.64 crores in FY 2023 and ₹47,966.05 crores in FY 2022.

  • Profit After Tax (PAT):
    The company’s profit after tax increased steadily over the years. As of June 30, 2024, PAT stood at ₹1,489.65 crores. For FY 2024, PAT was ₹6,060.04 crores, a significant rise from ₹4,709.25 crores in FY 2023, and ₹2,901.59 crores in FY 2022.

  • Net Worth:
    The company’s net worth as of June 30, 2024, is ₹12,148.71 crores. As of March 31, 2024, it was ₹10,665.66 crores. The highest net worth was recorded at ₹20,054.82 crores as of March 31, 2023, up from ₹16,856.26 crores in March 2022.

  • Reserves and Surplus:
    Hyundai Motor India’s reserves and surplus were ₹11,336.17 crores as of June 30, 2024. It was ₹9,853.12 crores as of March 31, 2024. The highest value was in March 2023, at ₹19,242.28 crores, up from ₹16,043.71 crores in March 2022.

  • Total Borrowing:
    Hyundai Motor India's total borrowing stood at ₹758.14 crores as of June 30, 2024. It slightly decreased from ₹767.92 crores in March 2024, down from ₹1,158.60 crores in March 2023, and ₹1,140.03 crores in March 2022.

Investment Risks and Opportunities

  • Potential Risks of Investing in the IPO:

    1. Fluctuations in raw material costs could impact margins.

    2. Increased competition in the EV market.

  • Opportunities and Growth Potential:

    1. Strong brand recognition and a robust distribution network.

    2. Expansion into the growing EV market offers significant growth potential.

Conclusion

The Hyundai Motor India IPO presents an exciting opportunity for investors, especially with the company's expansion plans in the EV market. However, potential investors should carefully review the risks and rewards before making a decision.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

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What is the Hyundai Motor India IPO and why is it significant?

Answer Field

The Hyundai Motor India IPO is significant as it offers investors a chance to participate in the growth of one of India’s top automobile manufacturers.

What is the price band for the Hyundai Motor India IPO, and how was it determined?

Answer Field

The price band is ₹1865-1960, determined by market conditions and the company’s valuation.

What are the key risks and rewards of investing in the Hyundai Motor India IPO?

Answer Field

Key risks include rising competition and market volatility. The rewards lie in Hyundai’s strong market presence and EV growth potential.

When will the Hyundai Motor India IPO shares be listed, and what is the expected market response?

Answer Field

The Hyundai Motor India IPO shares will be listed on Tuesday, October 22, 2024.

What documents should I review before investing in the Hyundai Motor India IPO?

Answer Field

Investors should review the DRHP, company’s financial statements, and risk factors before applying.

What are the lock-up period details for the Hyundai Motor India Limited IPO?

Answer Field

The lock-up period will be disclosed in the DRHP, usually restricting insiders from selling shares for a certain period post-listing.

How will the Hyundai Motor India Limited IPO impact existing shareholders?

Answer Field

Existing shareholders may experience dilution of ownership but benefit from the company’s growth post-IPO.

Will Hyundai Motor India Limited IPO pay dividends?

Answer Field

Dividend payout will depend on the company’s profitability and board decisions post-IPO.

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