Eyeing to become a home brand, Hyundai Motor India Ltd, part of Hyundai Motor Group will launch its initial public offering (IPO) on October 15. The IPO is entire an offer for sale by up to 14.22 crore shares by Hyundai Motor Company. The issue size at ₹27,870 crore (at the upper end) will be the largest ever in Indian IPO market.
The other big IPOs were LIC of India (₹21,000 crore), Paytm (₹18,300 crore) and Coal India (₹15,199 crore)
The price band of the initial share sale has been fixed as ₹1,865-1,960 a share with a face value of ₹10. The minimum bids can be made for 7 shares and multiples of 7 afterwards. The IPO, which will close on October 17, will open for anchor investors on October 14.
“India is the most exciting market in the world and Hyundai has been successful for the last 26 years. We are currently the second largest Original Equipment Manufacturer (OEM) in the country and we believe this is the right time to go forward to Indianise our operations and become a home brand,” Unsoo Kim, President of Hyundai Motor India, Middle East & Africa Strategic Region, told businessline.
“The IPO will ensure that the company is more dedicated to success in India and will provide an opportunity for local and global investors to add in our growth story. We will continue to pursue global standards and practices in terms of governance,” he further said
Rural demand up
The company stated that it has witnessed an uptick in the rural demand with consumers from the hinterland preferring advanced technologies in their vehicles.
“ The rural sales mix is going up and reached 21 per cent last month while the urban contributed to 79 per cent. We have observed that the share of SUVs in rural is also 68 per cent similar to urban. This shows that the rural customers are also shifting more towards SUVs. We are witnessing a big change in the rural preferences which traditionally were focussed on fuel efficiency but now the key purchase decisions are led by technology and design features,” said Tarun Garg, chief operating officer of Hyundai Motor India Limited to businessline.
The company that plans to invest ₹32,000 crore in the country over 10 years stated that 80 per cent of its volumes are domestic with 20 per cent exports with a revenue basis of 77 per cent and 23 per cent.
Hyundai Motor India Limited is targeting to ramp up the capacity of its Pune plant to 1.1 million units and plans on investing upto ₹6,000 crore.
IPO valuation
On IPO valuations being higher than the parent, an investment banker said: “We have seen many multinationals having their subsidiaries in India where the valuations are very different from their parent companies. That is because of the inherent growth and strength of the Indian market, the consumption story and the available opportunities. Accordingly, based on industry feedback, the bankers have arrived at the valuations for the IPO.”