Incorporated in 1996, Hyundai Motor India Limited is part of the Hyundai Motor Group, the third largest auto original equipment manufacturer (OEM) in the world based on passenger vehicle sales in CY2023. The company has a track record of manufacturing and selling reliable, feature-rich, and innovative four-wheeler passenger vehicles. Since Fiscal 2005, Hyundai Motor India has been the country’s largest exporter of passenger vehicles.
It manufactures and sells four-wheeler passenger vehicles, with a portfolio of 13 models across segments such as sedans, hatchbacks, sports-utility vehicles (SUVs), and battery electric vehicles (EVs). It also manufactures parts, such as transmissions and engines. Since 1998, the company has cumulatively sold nearly 12 million passenger vehicles in India and through exports.
Hyundai Motor India manufacturing plant is located in Chennai, Tamil Nadu, and has a production capacity of 8.24 lakh units as of 30 June 2024. It was HMC’s first global integrated manufacturing plant outside Korea. As of 30 June 2024, it sourced 93% of its parts and materials from the four districts adjoining its manufacturing plant to increase operational and cost efficiency.
The company has a network of 1,377 sales outlets operated by 364 dealer companies across 1,036 cities and towns in India as of 30 June 2024. Its network of 1,561 service centres also spans 957 cities and towns in India at the same time.
As of 30 June 2024, it had 5,672 full-time employees. India also has Hyundai Motor Group’s largest supply chain outside Korea, comprising 194 tier-1 and 1,083 tier-2 suppliers by location.
In FY24 alone, the company received more than 50 awards for the Hyundai brand and products. According to RHP, the company’s current market position is mainly due to its wide product offerings, the strong Hyundai brand in India, the ability to leverage new technologies to enhance operational and manufacturing efficiency, and the ability to expand into new businesses such as EVs through innovation.
Between FY22 and FY24, it saw a CAGR rise of over 13.8% in its revenue from operations and 27.8% in its net profit. Moreover, the domestic passenger vehicle industry is expected to grow at a CAGR of 4.5-6.5% to reach 5.7 million domestic vehicle sales between FY24 and FY29, which could benefit the company.
Now, Hyundai Motor India Limited is launching its initial public offer (IPO). The total IPO issue size is ₹27,870.16 crore, comprising entirely of an offer sale. The money raised from the issue will go to selling promoters. Its shares will be listed on the NSE and BSE.
Here are key details about the Hyundai Motor India IPO:
| Company Name | Hyundai Motor India Limited |
|---|---|
| Company Type | Private |
| Company Established | 1996 |
| Hyundai Motor India IPO Open Date | 15th October 2024 |
| Hyundai Motor India IPO Close Date | 17th October 2024 |
| Hyundai Motor India IPO Allotment Status | 18th October 2024 |
| Credit of Shares to Demat | 21st October 2024 |
| Hyundai Motor India IPO Listing Date | 22nd October 2024 |
| Hyundai Motor India IPO Face Value | ₹10 per share |
| Hyundai Motor India IPO Lot size | 7 shares |
| Hyundai Motor India IPO Issue Size | Approx ₹27,870.16 crore |
| Hyundai Motor India IPO Listed at | BSE, NSE |
| Hyundai Motor India IPO Price | ₹1,865 – ₹1,960 per share |
Financial snapshot
| ₹ crore | FY22 | FY23 | FY24 | Q1 FY25 |
|---|---|---|---|---|
| Income | 47,378 | 60,307 | 69,829 | 17,344 |
| Net profit | 2,901 | 4,709 | 6,060 | 1,489 |
Strengths
- The company is the largest auto OEM in India by sales volume in the mid-size SUV sub-segment between FY19 and three months ended 30 June 2024. Creta had a market share of 38% in the mid-size SUV sub-segment in the three months ended 30 June 2024.
- A diverse portfolio of passenger vehicles across major passenger vehicle segments such as Aura and Verna under sedans, Grand i10 NIOS, i20 and i20 N Line under hatchbacks, and Exter, Venue, Venue N Line, Creta, Creta N Line, Alcazar, Tucson and IONIQ 5 under SUVs.
- Ability to identify emerging market trends and introduce vehicles to meet current customer demands in time as it launched an aggregate of nine upgrades and model changes within a span of 21 months, from January 2023 to September 2024.
- Pan-India sales, distribution, and after-sale services network: As of 31 March 2024, its sales and service network was the second largest in India in terms of the number of customer touchpoints.
- Digitisation across the value chain with its ‘Click to Buy’ website, ‘myHyundai’ and ‘H-Smart’ apps, and Global Dealer Management System (GDMS).
- Flexible and automated manufacturing capabilities with a production rate of one passenger vehicle within 30 seconds, 2,000+ critical machines and 743 robots as of 30 June 2024.
Risks and threats
- Increases in the prices of parts and materials could adversely affect its business, as it depends on many factors, such as the concessional rate on customs duties for imports under the Comprehensive Economic Partnership Agreements between the governments of Korea and India.
- The company depends on a limited number of suppliers, as 42% of its total purchase cost was accounted for by its top 5 suppliers in Q1 FY25, and any interruption could adversely affect its business.
- Significantly dependent on its promoter group - HMC, for its operations.
- The company has to pay royalties to its parent company, equivalent to 3.5% of total sales revenue. Hence, any increase in the royalty fee could adversely impact its profitability.
- Subject to risks associated with the concentration of its manufacturing facilities, as all of its passenger vehicles are manufactured at its plant in Chennai.
- It receives many incentives, including electricity tax, central sales tax, and subsidies for investment promotion and clean energy vehicles, and a reduction would adversely affect its finances.
- Global operations expose it to geopolitical, legal, socio-economic and forex risks.
- Faces competition from Tata Motors, Mahindra & Mahindra, Maruti Suzuki India, Kia Motors, Volkswagen, Nissan Motor, and Honda Cars India.
- Substantially dependent on the sale of its SUV model as it contributed 67% to the total domestic sales as of Q1 FY25.
- Business is seasonal and cyclical in nature and subject to reduced sales during some quarters.
- Has consistently experienced negative cash flows from investing and financing activities between FY22 and FY24.
You can now apply for the Hyundai Motor India IPO on Upstox. Click here.