Hyundai India gears up for IPO with ₹32,000 Cr expansion plan, targeting 1.1M Unit capacity

India IPO

Updated Oct 12, 2024

The company’s capital expenditures have historically been focused on acquiring property, plant, and equipment for new vehicle launches.

Hyundai India gears up for IPO with ₹32,000 Cr expansion plan, targeting 1.1M Unit capacity

Hyundai Motor India Ltd (HMIL), the Indian division of the South Korean automaker, is preparing to go public on the Indian stock exchanges on October 22. As part of its growth strategy, HMIL has allocated Rs 32,000 crore for investments in India between 2023 and 2032, focusing on expanding capacity, developing new products and platforms, and introducing new launches. The company is also strengthening its presence in the Battery Electric Vehicle (BEV) market.

According to HMIL’s Red Herring Prospectus (RHP), the company has signed four memoranda of understanding with the Government of Tamil Nadu for its Chennai plant and agreements with the Government of Maharashtra for its Talegaon plant. These investments total approximately Rs 32,000 crore. HMIL's Managing Director and CEO, Unsoo Kim, previously disclosed plans to invest Rs 26,000 crore for the Chennai facility and Rs 6,000 crore for the Pune facility. This will increase Hyundai India’s production capacity from 824,000 units to 1.1 million units annually by 2028, enabling the company to meet both domestic and export demand.

The company’s capital expenditures have historically been focused on acquiring property, plant, and equipment for new vehicle launches. In fiscal years 2022, 2023, and 2024, and for the three-month periods ending June 30, 2024, and 2023, HMIL spent Rs 12,649.79 million, Rs 22,609.82 million, Rs 32,462.08 million, Rs 5,355.84 million, and Rs 5,590.72 million respectively, on these acquisitions, according to the RHP.

For 2024, HMIL aims to produce 775,000 units, a slight increase from the 765,000 units produced in 2023. Its Pune plant, which is set to start operations in the latter half of 2025, will have an initial production capacity of 170,000 units, with an additional 80,000 units added in a second phase, bringing the plant’s total capacity to 250,000 units.

Hyundai is also ramping up its focus on SUVs and has developed an electric vehicle (EV) strategy. This includes four upcoming battery-powered models that span across different segments, from a mass-market e-car to premium models, including an electric version of its popular Creta SUV. The company is also working to localize the production of EV battery pack assemblies and powertrains. In FY2024, Hyundai India reported a total income of Rs 71,302 crore and a profit of Rs 6,060 crore, compared to Rs 61,436 crore in income and Rs 4,709 crore in profit for FY2023, as noted in its prospectus.

Hyundai India is set to launch the country’s largest initial public offering (IPO) worth Rs 27,870 crore, with a price range set between Rs 1,865 and Rs 1,960 per share. The IPO will be open for subscription from October 15 to 17, with anchor investors bidding on October 14. The IPO is seen as an effort to further integrate Hyundai into the Indian market. Hyundai India’s COO, Tarun Garg, emphasized that this move will help the company pursue global standards in operations and governance. Garg also explained that Hyundai chose India for its public listing due to the brand’s strong acceptance in the country, making it an ideal market for the IPO.