Hyundai, India’s second-largest car manufacturer after Maruti Suzuki, aims to raise at least $3 billion (approximately ₹25,000 crore) through its IPO, which would value the company at around $18 billion or roughly ₹1.5 lakh crore.
Currently, the largest IPO in India is LIC’s public offering of ₹21,008 crore, launched in May 2022. The Hyundai IPO will involve an offer for sale (OFS) of up to 142 million shares, representing a 17.5% stake from its South Korean parent, Hyundai Motor Company.
Hyundai derives 66% of its domestic sales from SUVs, surpassing the industry average, according to ET Prime. This growing share of higher-priced, more profitable SUVs has boosted operating profit margins, increasing from an average of 7% over FY16-23 to 9.5% in FY24 (for nine months). However, a 100-basis point increase in royalties could result in flat earnings per share (EPS) growth for FY24-25, with estimates suggesting Hyundai’s EPS will remain around ₹75 for both years, close to the annualized EPS of ₹72 reported in the first nine months of FY24. If Hyundai were valued at the same forward multiple as Maruti Suzuki—26x FY25 EPS—it would imply a valuation of around ₹1,950, as per ET Prime. However, due to Hyundai’s superior free cash flows compared to Maruti Suzuki, investors might value it at a slight premium over India’s top carmaker.
If the 142 million shares are priced at ₹2,000 each, the IPO could raise as much as ₹28,000 crore, significantly higher than the ₹21,000 crore raised by the LIC IPO.
Hyundai has boosted the annual production capacity at its Chennai plant to 824,000 units as of the end of March. The company has stated that this facility will continue to be a key hub for the production of SUVs and electric vehicles (EVs). Additionally, the newly acquired Talegaon plant is set to contribute 170,000 units to its production capacity in its first phase, with operations expected to commence in the second half of FY26. This will bring Hyundai’s total production capacity to 994,000 units by FY27.
The IPO is expected to support Hyundai Motor’s ambitious strategy to position India as a major export hub, enhancing its global business while also targeting growth in the domestic market, according to senior industry executives familiar with the situation.
“Hyundai has faced capacity constraints over the past few years,” one industry executive noted. “The company has already increased its manufacturing capacity in Chennai to 820,000 units annually to satisfy domestic demand. With the additional capacity from the Talegaon plant expected in 2025, Hyundai aims to boost exports from India, which have been well-received in markets across Latin America, the Middle East, and Africa.”
The automaker will need to maintain a fine balance between market share and margins after its listing, Ramakrishnan told Reuters. “If there is a drop in either one, the company can be questioned by shareholders,” he said. Hyundai’s shrinking market share has come despite hitting its highest-ever sales in India last fiscal year.