NEW DELHI: Hyundai Motors India, which is looking to raise Rs 25,000 crore through public issue of shares, has availed tax exemptions and government incentives worth Rs 886 crore in the first nine months of 2023-24, the draft red herring prospectus (DRHP) of the company showed.
In the previous financial year, the company had availed Rs 1,205 crore worth of those incentives.
These incentives include electricity tax exemptions, investment promotion subsidies in the form of state GST reimbursements, fiscal incentives such as a central sales tax (CST) soft loan at a concessional rate of interest; clean energy vehicle (CEV) subsidy; and interest free deferred sales tax.
However, the largest part of the exemptions availed was accounted for by duty drawbacks at Rs 385 crore, and duty remission in lieu of exports at Rs 130 crore. Duty drawback is the export benefit given to rebate the custom duties charged on imported materials, which are used for manufacture of exported goods.
The company discloses in the DRHP that the unavailability, reduction or elimination of government incentives could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
The company entered into an arrangement with the Tamil Nadu government in January 2024 whereby it may receive incentives and subsidies from the government subject to it making a minimum investment in fixed assets within a specific period for the development of EV manufacturing infrastructure in the state.
Similarly, for the Talegaon plant, it has received offer letters from Maharashtra government under which it is required to make a minimum investment in fixed assets within a specific period for availing certain incentives including but not limited to electricity duty exemption, industrial promotion subsidy and stamp duty exemption. The company manufactures all its passenger vehicles and parts including engines and transmissions only at the Chennai manufacturing plant.
It acquired the Talegaon 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 FY26. It is eligible for refund of partial Stamp Duty, paid on acquisition of the new plant at Talegaon.