Hyundai Motor India IPO: From strengths and risks to financials, five things to know

Hyundai Motor India IPO: Strengths

• The company is the largest auto original equipment manufacturer (OEM) in the country by sales volume in the mid-size sport utility vehicle (SUV) sub-segment between the financial year 2018-19 (FY19) and the first 11 months of FY24. Creta enjoyed a market share of 30% in the mid-size SUV segment in the first 11 months of fiscal 2024.
• A diverse portfolio of passenger vehicles includes Aura, Verna, Grand i10 NIOS, i20, i20 N Line, Venue, Venue N Line, Exter, Creta, Creta N Line, Tucson, Alcazar, and IONIQ 5.
• Ability to identify market trends and introduce vehicles to meet customer demands.
• As of March 31, 2023, the company has the second-largest sales and service network regarding customer touchpoints.
• Digitisation across the value chain with the automaker's 'Click to Buy' portal, 'H-Smart' and 'myHyundai' applications, and Global Dealer Management System (GDMS).
• The company has flexible and automated manufacturing capabilities, with a passenger vehicle (PV) production rate within 30 seconds, 708 robots, and 2,000 critical machines as of March 31, 2024.

Hyundai Motor India IPO: Risks

• Surge in prices of parts and materials could affect its business as it is dependent on many factors, such as the concessional rate on customs duties for imports under the CAPA (Comprehensive Economic Partnership Agreements) between India and Korea.
• It depends on a limited number of suppliers. In FY23, its top five supplies accounted for 43% of the total purchase cost.
• The company significantly depends on its promoter, Hyundai Motor Company, for its operations.
• Subject to risks related to its manufacturing facilities, as all its PVs are manufactured in the Chennai plant.
• It gets incentives on central sales tax, electricity tax and subsidies for clean energy vehicles. Any reduction in subsidies and incentives can affect its finances.
• The company is exposed to geopolitical, socio-economic, legal and forex risks due to its global operations.
• Faces competition from Mahindra & Mahindra, Tata Motors, Kia Motors, Maruti Suzuki India, Volkswagen, Honda Cars India and Nissan Motor.
• The SUV segment contributes 62% of its total domestic sales as of Q3 FY24.
• Business is seasonal and is subjected to reduced sales during some quarters.
• Has experienced negative cash flows in the past.

Hyundai Motor India IPO: Financials

The carmaker reported a net profit of ₹6,060 crore for the financial year 2023-24 (FY24), reflecting an increase of 28.7% from the previous fiscal. The revenue stood at ₹69,829 crore, an increase of 15.8% from FY23.

In the April-June quarter of FY25, the company reported a revenue of ₹17,344.2 crore, up 4.3% year-on-year (YoY). The net profit also surged 12.1% YoY to ₹1,489.6 crore in Q1 FY25.

Hyundai Motor India IPO: Lot size

Hyundai Motor India IPO: Timeline