Hyundai India gets ready to drive in with its IPO

For those looking to invest in IPOs, there’s good news. Hyundai Motor’s Indian unit, Hyundai Motor India, is accelerating preparations to launch an IPO in India. Hyundai is expected to submit a draft red herring prospectus (DRHP) to the market regulator SEBI in the coming days. Along with this, the process of launching the IPO will begin. It is said that this IPO could be bigger than LIC’s IPO. Let’s find out when Hyundai’s IPO could be launched and 8 important things related to it.

1) According to a report in The Economic Times, Hyundai Motor India is likely to file draft documents related to the IPO within the next two weeks. After filing the DRHP, the company can start roadshows to attract investors.

2) After the submission of DRHP, the IPO could receive approval from the market regulator SEBI within 60 to 90 days. Therefore, Hyundai Motor India’s IPO could hit the market in September or October.

3) Hyundai Motor India is the second-largest car manufacturer in the country in terms of passenger vehicle sales. If the company succeeds in launching its IPO, it will be the first IPO of any auto company in India in more than two decades. Before this, the country’s largest car manufacturer, Maruti Suzuki, had launched its IPO in 2003.

4) According to the report, Hyundai’s attempt through the IPO is to capitalize on the ongoing momentum in the Indian stock market. The Indian equity market has given an annual return of 14% in the past decade. As a result, it has become one of the top 5 performing markets in the world.

5) According to media reports, Hyundai plans to raise $2.5 to $3 billion through the IPO. If successful, this could be the largest IPO in Indian history. The record for the largest IPO in the country is currently held by Life Insurance Corporation (LIC). The government raised around ₹21,000 crores ($2.7 billion) by selling a 3.5% stake in LIC through its IPO in 2022.

6) However, the valuation and size of Hyundai’s IPO have not been finalized yet. It may vary based on the company’s strategy and market conditions.

7) Hyundai Motor India recently added Kotak Mahindra Bank and Morgan Stanley to its team of lead investment bankers in May. Meanwhile, City Group, HSBC Holdings Plc, and JPMorgan Chase & Co have been included as advisors for the IPO.

8) There is tough competition between Hyundai and Tata Motors in terms of passenger vehicle sales. However, Hyundai maintained its second position in May. Hyundai India sold 63,551 vehicles in May 2024. The Creta was the highest-selling car for Hyundai. During this period, 14,662 Creta cars were sold. Meanwhile, Tata Motors sold 46,697 vehicles in May.

There has been a significant increase in the number of IPOs in FY2023-24 compared to FY2023. 78 IPOs were listed in the financial year 2023-24. Out of these, 13 shares have given multi-bagger returns to investors. If you are also considering investing in IPOs, there are queues for IPOs of many companies, including Hyundai.