Summary

  • Hyundai Motor India is the second-largest PV by volumes.
  • Hyundai Motor plans IPO expected to raise record $3 billion.
  • It is believed that its IPO will hit the market within 4-6 months.

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Hyundai Motor India Limited (HMIL), is a wholly owned subsidiary of Hyundai Motor Company (HMC). HMIL operates with a network of 1,366 sales points and 1,550 service points across India. Hyundai Motor model line-up consists of car models across different customer segments, including Grand i10 NIOS, i20, i20 N Line, AURA, EXTER, VENUE, VENUE N Line, VERNA, CRETA, CRETA N Line, ALCAZAR, TUCSON and the all-electric SUV IONIQ 5. HMIL’s manufacturing plant near Chennai, is optimised to manufacture full range of vehicle models. HMIL also forms a critical part of HMC’s global export hub with exports spanning across Africa, the Middle East, and other countries including Bangladesh, Nepal, Bhutan and Sri Lanka.1

IPO

Hyundai Motor plans IPO of almost $3 billion, likely to be India's biggest

Hyundai's IPO is entirely an offer for sale (OFS) of 142,194,700 equity shares as parent sell a stake of up to 17.5% in the company.

The Hyundai draft prospectus filed gave no details of the pricing of the IPO or the company’s valuation, but it is expected Hyundai aims to raise around $2.5 to $3 billion (Rs 21,000 - 25,000 crore) with a valuation of up to $30 billion.

Industry Overview

Despite slowdown in the near term, India’s growth is expected to outperform over the medium run. CRISIL MI&A expects GDP growth to average 7.0% between Fiscals 2025 and 2029, compared with 3.2% globally as estimated by the IMF. India’s economic outlook remains positive, supported by structural reforms aimed at positioning it as one of the fastest-growing major economies. According to Finance Ministry, India is expected to become the 3rd largest economy in the world with a GDP of US$ 5 trillion by Fiscal 2028.2

According to International Organization of Motor Vehicle Manufacturers, in calendar year (CY) 2023 global passenger vehicle sales rebounded significantly and grew by 11.3% after remaining stable in 2022 as supply chain challenges eased. The passenger vehicle volumes reached 65.3 million in 2023, from 64.8 million in 2019 surpassing the pre-covid volumes. During the same period, the industry grew at a CAGR of 0.2%. The Indian PV market is one of the fastest growing in the world (CAGR 2021-2023), growing at 15.4% vs. 6.8% for Global passenger vehicle market.

Between Fiscals 2019 and 2024, India’s domestic PV (Passenger Vehicle) sales volume rose at 5% CAGR. This growth was despite the sales contraction (at 10% CAGR) witnessed during Fiscals 2019 to 2021. From the low base of Fiscal 2021, PV sales bounced back and grew at a healthy pace to reach a historic high of 3.9 million vehicles in Fiscal 2023.

The share of SUVs in overall domestic PV sales to more than double from 23% in Fiscal 2019 to 50% in Fiscal 2024 (April to February). During the last 5 years, while industry witnessed a growth at 5% CAGR, the SUV segment grew at more than 4 times growth rate of 23% CAGR.

CRISIL MI&A has considered 3 different GDP growth scenarios for the next 5 years. At a 6% CAGR GDP growth scenario, the PV industry is projected to reach approximately 5.2 million units by Fiscal 2029 growing at 4.5% CAGR in the next 5 years. Assuming a 7% CAGR GDP growth, 5.5% CAGR growth can be achieved for the PV industry. If India achieves 8% CAGR GDP growth in the next 5 years, the domestic passenger vehicle industry will clock approximately 6.5% CAGR growth and reach approximately 5.7 million vehicle levels by Fiscal 2029 according to CRISIL MI&A estimates.

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Company Overview

Hyundai Motor primarily manufacture and sell four-wheeler passenger vehicles and parts, such as transmissions and engines in India and outside India. Hyundai Motor also provide extended warranties and insurance broking services.

Hyundai Cars

  • Grand i10 Nios
  • i20
  • i20 N Line
  • Aura
  • Verna
  • Exter
  • Venue
  • Venue N Line
  • Creta
  • Creta N Line
  • Alcazar
  • Tucson
  • Kona Electric
  • Ioniq5 

Hyundai Motor has three manufacturing plants in India – two operating plants in Irrungattukottai, Sriperumbudur in Tamil Nadu – the Chennai Manufacturing Plant; and one plant at Talegaon in Pune in Maharashtra – Talegaon Manufacturing Plant, which is under redevelopment.

Talegaon Manufacturing Plant from General Motors India on December 28, 2023, which is under redevelopment and is expected to be operational in phases – with the first phase to be operational by the second half of Fiscal 2026. The timing of the next phases will be determined based on market demand. The Talegaon Manufacturing Plant is an integrated passenger vehicle and engine manufacturing facility across approximately 300 acres of leased land allotted by the industrial development corporation premises.

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References

  1. ^ https://www.hyundai.com/in/en/investor-relations
  2. ^ https://www.hyundai.com/content/dam/hyundai/in/en/data/investor-relations/HMILDRHP.pdf
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Created by Asif Farooqui on 2024/06/18 17:34
     
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