IPO-bound Hyundai Motor India to invest ₹32,000 crore over next 10 years; develop manufacturing hub for EMs

Hyundai Motor India IPO: Hyundai Motor India plans to invest ₹32,000 crore in the country between 2023 and 2032. The South Korean automaker will use the proceeds of its upcoming Indian unit's initial public offering (IPO) to enhance its research efforts and develop new cars, aspiring to transform the country into a manufacturing hub for emerging markets (EMs).

Hyundai Motor India Managing Director Unsoo Kim said during an IPO-related press conference on Wednesday, October 9, that the auto major is also investing ₹6,000 crore in its Pune unit. India's second-largest carmaker by sales will also add capacity in the electric vehicle (EV) segment.

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“From a capacity point of view, a new plant in Pune is coming up, which will increase our capacity from currently 824,000 to almost close to 1.1 million, which is a 30 per cent addition in capacity by 2028,” said Unsoo.

"So you can see that in the next three to four years, almost 30 per cent capacity addition is happening, which will give us a lot of headroom both in domestic and exports to increase our volumes and market share," Unsoo added. 

With a contribution of 15 per cent to sales, India is the third-biggest revenue generator for Hyundai after the US and South Korea. It has invested $5 billion in the country and plans to pump in another $4 billion over the next decade in the world's third-biggest car market.

Hyundai Motor India will aggressively invest in new products, advanced technology, and R&D capabilities in Indian operations. The IPO will allow local and global investors to participate in the company's growth story. Highlighting the strategy for rural areas, Hyundai India said that rural penetration is at the highest in its history.

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"Our rural penetration is now at the highest in Hyundai's history. At the same time, I'd like to break this myth that rural customers... want small cars or hatches. Let me share with you that for the January to September period, our SUV contribution in rural is equal to SUV contribution in urban," an official said during the press briefing.

Hyundai Motor India IPO Details

The much-awaited mainboard IPO of the leading auto major will open for subscription on Tuesday, October 15, 2024. The IPO of the Indian subsidiary of South Korea's Hyundai Motor Company is set to become the largest public issue in India, surpassing Life Insurance Corporation's (LIC) IPO worth ₹21,000 crore. It would also be one of Asia’s biggest IPOs in recent years.

Also Read: Hyundai Motor India IPO: How the auto major compares with listed peers on valuation, key financial metrics

South Korean automaker Hyundai aims to raise $3.3 billion in its IPO and has set the IPO's price range at ₹1,865 to ₹1,960 per share, as per a Bloomberg report. Bids will open next week, and shares will start trading on October 22.

The upcoming IPO will be Hyundai's first stock market listing outside South Korea. It will also mark India's first carmaker to go public in over two decades since Maruti Suzuki India's public issue in 2003. Hyundai Motor India is also the second largest carmaker by sales in India after Maruti Suzuki India.

Hyundai Motor India plans to raise around ₹27,000 crore. Hyundai will not issue new shares in the IPO, which will involve its South Korean parent selling up to 142,194,700 shares (14.22 crore shares) or a 17.5 per cent of its stake in the wholly owned unit to retail and other investors through the offer for sale (OFS) route. Hence, the book-built issue is an OFS of 14.22 crore shares with a face value of ₹10 each.

Also Read: Hyundai, Kia to launch first India-made EVs by 2025, aiming for greater footprint in local market

The promoter-selling shareholder will receive all offer proceeds after deducting offer-related costs and applicable taxes, which the promoter-selling shareholder will be responsible for paying. The company will not receive any of the offer's proceeds.

The book-running lead managers (BLRMs) are Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, JP Morgan India Private Limited, and Morgan Stanley India Company Pvt Ltd, whereas Kfin Technologies Limited is the key issue registrar.