The Hyundai logo.
Credit: Reuters File Photo
Bengaluru: Hyundai Motor India will launch its Rs 27,800 crore initial public offering (IPO) next week, which will be the country's largest public issue till date.
"The proceeds of the issue will be used to invest in new products, future technology, and to improve research and development capabilities," said Unsoo Kim, managing director of Hyundai Motor India.
The upcoming market debut by India’s second largest carmaker by sales volume will be larger than the Rs 21,000 crore IPO of Life Insurance Corporation of India (LIC) in May 2022, Paytm ( Rs 18,300 crore, November 2021), and Coal India (Rs 15,199 crore, October 2010).
The IPO is expected to value HMI at Rs 1.62 lakh crore.
South Korea's Hyundai Motor Company, the parent company of HMI, will be offloading 14.2 crore equity shares and selling a 17.5% stake in its Indian arm through the IPO.
HMI currently has two manufacturing plants in Chennai with an annual production capacity of 824,000 units and aims to scale up the capacity to 1 million units per year by 2028. Its newly acquired Pune plant is scheduled to commence production by 2025.
"In the next 3-4 years, a 30% increase in production capacity will improve our domestic and export volumes and market share," said Tarun Garg, Chief Operating Officer of Hyundai India at the pre-IPO media briefing on Wednesday.
Garg expects auto sales in India to improve in the current festive season.
Priced in the range of Rs 1,865 to Rs 1,960 per share, the IPO will be open to the public from October 15-17 and for anchor investors on October 14. The book running lead managers include Kotak Mahindra, HSBC Securities, JP Morgan and Morgan Stanley, among others.
Sports Utility Vehicles accounted for 68% of HMI’s total vehicle sales in the January-September period of this fiscal year, compared to 60% in the same period last year.
"We believe that in a market like India, there is a need to be present in every segment, and we will continue to look for opportunities that exist in any segment. At this point in time, it seems that the preference is higher for SUVs, which is why our focus is more on SUVs," Kim said.