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Saturday, June 15, 2024

Hyundai Motors will bring the biggest IPO, LIC's record will be broken

Hyundai Motors has announced to spend Rs 32 thousand crore in India in the next 10 years. Which includes Rs 6 thousand crore to acquire General Motors' plant. At the same time, Rs 26 thousand crore will be spent on expanding production in Tamil Nadu, EV manufacturing, charging infrastructure.

South Korean company Hyundai Motor is considering selling up to 17.5 percent stake in its Indian unit under an IPO. Draft papers filed with the country's market regulator on Saturday showed that this could be India's largest IPO ever. According to a filing with the Securities and Exchange Board of India (SEBI), Hyundai Motor will bring 142 million shares out of a total of 812 million shares for sale in the IPO.

LIC's record will be broken

It is reported that the size of Hyundai Motor's IPO can be Rs 25 thousand crores. This means that this IPO will be the largest IPO in the country. Earlier, LIC had brought the country's largest IPO. Whose size was Rs 21 thousand crores. The special thing is that Hyundai is not bringing fresh shares under the IPO. This IPO will be completely OFS based. The company will keep a part of its stake for retail investors and the rest will be for other investors.

Auto company's IPO will come after 20 years

The special thing is that after about 20 years, the IPO of an auto company is coming to the stock market in the country. Earlier, Maruti Suzuki's IPO came in the stock market. Maruti Suzuki's IPO came in the year 2023. On the other hand, earlier this week, electric two-wheeler company Ola Electric has got the approval of capital market regulator SEBI to bring IPO.

Where will the money be spent?

Industry experts say that HMIL will use this fund to meet its capex plan in India, which is estimated to be around Rs 32,000 crore over the next 10 years. According to data from Capitaline, the South Korean car company's Indian arm had cash of about Rs 17,741 crore and achieved a profit after tax (PAT) of about Rs 4,654 crore on revenue of about Rs 59,761 crore in FY23. Despite a decline during the pandemic year of FY21 (Rs 1,847 crore), the company's PAT doubled in five years from Rs 2,124 crore in FY18.

How will the company spend 32 thousand crores

HMIL's investment plans include Rs 6,000 crore for the newly acquired plant from General Motors in Talegaon and Rs 26,000 crore over the next 10 years to expand production in Tamil Nadu, develop a component ecosystem, EV manufacturing, charging infrastructure and skill development.

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