Hyundai Motor India IPO debuts October 15: Key strengths, risks and financial insights

Hyundai IPO open date: The ₹27,870.1 crore Hyundai Motor India's initial public offering, which will be India's largest, will open for subscription on Tuesday, October 15. The IPO, which will end on October 17, has set a price band of ₹1,865-₹1,960 per equity share.

The initial share sale is an offer-for-sale (OFS) of 14.21 crore shares by promoter Hyundai Motor Company (HMC). There is no fresh issue component.

Hyundai Motor India IPO: Risks

• Increase in parts and material price can affect business.
• It depends significantly on the promoter Hyundai Motor Company for operations.
• The company is dependent on limited suppliers. In the financial year 2022-23, its top five suppliers represented 43% of the total purchase cost.
• It is subject to the risk associated with manufacturing plants as all of its passenger vehicles (PVs) are manufactured in the Chennai facility.
• Because of its global operations, Hyundai Motor India is exposed to geopolitical, legal, socio-economic, and forex risks.
• The company receives incentives on central sales tax, clean energy vehicles and electricity tax. Any deduction in incentives and subsidies can affect finances.
• It faces competition from Maruti Suzuki India, Mahindra & Mahindra, Kia Motors, Tata Motors, Nissan Motor, Honda Cars India and Volkswagen.
• Business is seasonal and may encounter reduced sales in some quarters.
• The company's 62% domestic sales were in the SUV segment as of Q3 FY24.
• Has witnessed negative cash flows in the past.

Hyundai Motor India IPO: Strengths

• Hyundai Motor India is the largest auto original equipment manufacturer or OEM in India by sales volume in the midsize SUV sub-segment between FY19 and the first 11 months of FY24. In the first 11 months of FY24, Creta held a 30% market share in the midsize SUV segment.
• Has experience identifying market trends and introducing vehicles to meet demand.
• Offers multiple vehicle options, including Verna, Aura, Grand i10 NIOS, i20, i20 N Line, Exter, Creta, Creta N Line, Alcazar, Venue, Venue N Line, Tucson, and IONIQ 5.
• Digitisation is integrated across the value chain with the carmaker's 'Click to Buy' portal, 'myHyundai' and 'H-Smart' apps, as well as Global Dealer Management System (GDMS).
• It has second-largest sales and service network in terms of customer touchpoints as of March 31, 2023.
• Flexible and automated manufacturing abilities with a production rate of one passenger vehicle within half a minute, 2,000 crucial machines and 708 robots as of March 31, 2024.

Hyundai Motor India IPO: Financials

Hyundai Motor India posted a net profit of ₹6,060 crore in FY24, up 28.7% from FY23. Revenue increased 15.8% year-on-year (YoY) to ₹69,829 crore in fiscal 2024.

In the first quarter of FY25, the revenue rose 4.3% YoY to ₹17,344.2 crore, while the net profit grew 12.1% YoY to ₹1,489.6 crore.