Hyundai sets price band at Rs 1,865-1,960 for Rs 27,870 cr IPO

The issue opens on October 15. Employees have a Rs 186 discount apiece from the declared price band.
Representative Image.
Representative Image. (Photo | Hyundai Motor India Ltd.)
Updated on
2 min read

MUMBAI: Hyundai Motor India on Wednesday announced the price band for its initial share sale worth Rs 27,870 crore, making it the biggest-ever share sale in Dalal Street’s history at Rs 1,865-1,960 a share.

This will value the second-largest domestic carmaker at Rs 1.59 lakh crore or a tad less than $19 billion, which is as much as 42% of its parent Hyundai Motor Corp’s $44 billion current valuation.

The issue, which is only an offer for sale, through which the parent will sell 17.5% or 14.2 crore of its equity in the issuer and has no fresh issue, therefore, the entire proceeds will go to the selling shareholder and not to the company.

The issue opens on October 15. Employees have a Rs 186 discount apiece from the declared price band. While at the upper end of price band, the company will raise Rs 27,870 crore, making it the largest-ever IPO, breaking record set by LIC in May 2022, raising Rs 23,000 crore. At the upper-end the company is commanding a premium of 159x.

When asked about high premium valuing it 42% of its parent’s value, which is the world’s third-largest carmaker, ibankers said. Tarun Garg, COO of Hyundai, said many MNCs that have subsidiaries operating here have at different valuations to that of the parent. One of bankers to the issue, Citigroup’s Rahul Saraf said the consumption story offered here is very different and so the valuations commands a higher multiple.

“We have been India’s largest exporter of passenger vehicles from fiscal 2005 to the first 11 months of fiscal 2024, having exported the highest cumulative number of passenger vehicles. Since 1998 and up to March 2024, we have cumulatively sold nearly 12 million PV in the country and through exports. In 2023, we were among the top three contributors to our parent’s global sales volumes, and our contribution to its sales volume has risen from 15.48% in 2018 to 18.19% in 2023,” Unsoo Kim, MD, Hyundai India said.

Kim said the company has plans to invest Rs 32,000 crore here over next decade and will invest to make its Pune plant automated, aiming for a healthy mix of domestic and exports sales.

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com