Hyundai Motor India Limited (HMIL), the Indian arm of South Korean auto giant Hyundai Motor Co, is gearing up to launch a massive $3 billion IPO, which could become the largest initial public offering (IPO) in India’s corporate history. This offering is set to surpass the previous record held by the $2.7 billion IPO of Life Insurance Corporation (LIC) in 2022.
India’s market regulator SEBI has given the green light for the IPO expected to launch in October after reviewing the draft papers filed by Hyundai in June. Once finalized, this IPO, structured as an Offer for Sale (OFS) by the promoter, will not only mark Hyundai’s debut on the Indian stock exchanges but will also make it India Inc.’s largest-ever IPO.

Key details of Hyundai Motor India’s IPO

IPO size: Hyundai Motor India is aiming to raise around $3 billion through its IPO, with a target valuation ranging between $18 billion and $20 billion.

Offer structure: The IPO involves the sale of 142,194,700 equity shares with a face value of ₹10 each by the Promoter Selling Shareholder.

Strategic benefits: Hyundai expects the listing to enhance its visibility, brand image, and provide increased liquidity in the Indian market.

As of FY24, Hyundai Motor India was the second-largest car manufacturer in India, trailing only behind Maruti Suzuki in terms of passenger vehicle sales. Hyundai offers a diverse portfolio of 13 models, including sedans, hatchbacks, SUVs, and battery electric vehicles (EVs), and has played a crucial role in India’s automotive export market.

Hyundai has been the second-largest auto original equipment manufacturer (OEM) in India’s passenger vehicle market since Fiscal 2009. The company has been India’s largest exporter of passenger vehicles since Fiscal 2005, contributing significantly to Hyundai Motor Co’s global sales, with its share rising from 15.48% in 2018 to 18.19% in 2023.

Hyundai’s planned IPO comes at a time when its main competitor, Maruti Suzuki, has seen a 20.25% rise in share prices over the past year, with a market cap of approximately ₹4,00,000 crore ($48 billion). The listing of Hyundai’s Indian arm is expected to attract significant investor attention, potentially altering the competitive landscape in India’s automotive sector.

While Hyundai’s IPO is poised to make a significant impact, it comes amid an environment of geopolitical shocks and supply chain disruptions that could affect global commodity prices. The current account deficit is expected to widen, adding to the challenges for the Indian economy. However, Hyundai’s strong position in both domestic sales and exports provides a stable foundation for its future growth.

With SEBI’s final approval, Hyundai’s much-anticipated $3 billion IPO is set to not only break records but also further strengthen the company’s standing in the Indian automotive market and beyond

Hyundai Motor India Limited (HMIL), the second-largest carmaker in India after Maruti Suzuki in FY24 based on passenger sales volumes, is gearing up for a monumental IPO. The company has invested $5 billion in its two manufacturing units in India, which remains its third-largest revenue market. Hyundai expects the IPO to enhance its visibility and brand image in India. Additionally, the listing will provide liquidity and create a public market for its shares.

Hyundai Motor India’s arm is set to file draft papers with SEBI, targeting to raise $3 billion through an initial public offering (IPO) at a valuation between $18 billion to $20 billion. The South Korean parent company plans to sell up to 142 million shares, representing a 17.5% stake in its Indian subsidiary through the “offer for sale” (OFS) route. If successful, this will surpass the previous record set by LIC’s $2.7 billion IPO in 2022.

The company ended FY23 with revenue of Rs 60,000 crore and profits of Rs 4,653 crore, the highest among non-listed car manufacturers in India. Hyundai Motor India is a major player in the Indian automotive market, contributing around 13% to Hyundai’s global sales in 2023. Popular models include the i20, Verna, Creta, Aura, and Tucson. Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital, and Morgan Stanley are advising on the transaction. HMIL achieved its highest-ever domestic sales in 2023, crossing the six-lakh mark.

The IPO is expected to draw significant attention from investors, given Hyundai’s strong performance and market position. This IPO could redefine the Indian automotive market landscape, providing Hyundai with the capital to expand and innovate further.

The Indian electric vehicle (EV) market is on an impressive growth trajectory. Expected to skyrocket from US$2 billion in 2023 to US$7.09 billion by 2025, the industry aims for 10 million annual sales by 2030. Despite EVs making up only 1.3% of car sales in 2022, the sector’s potential is vast, with over a million EVs sold in FY 2022-2023. Projections indicate a $113.99 billion market by 2029, sparking increased interest in EV stocks in India, from manufacturers like Tata Motors to battery giants like Exide Industries and infrastructure specialists like Power Grid Corporation.

Explore the best EV stocks in India based on various factors, their investments in the EV sector, key features of leading EV companies, an overview of the EV market in India, and strategies for investing in EV stocks.

Key players in India’s EV market

Hindustan Copper Ltd

 Crucial for electric motors and wiring, Hindustan Copper supports the EV industry’s growth. In 2019, it formed strategic joint ventures with NALCO and MECL. In January 2024, KABIL signed an agreement with Argentina’s CAMYEN SE to develop lithium mines.

Himadri Speciality Chemical Ltd

Producing materials for lithium-ion batteries, Himadri is pivotal for EV battery efficiency. The company announced a Rs. 4,800 crore investment in December 2023 to manufacture lithium-ion battery components.

Servotech Power Systems Ltd

Specializing in solar products, Servotech is expanding into the GCC region and setting up an EV plant in Uttar Pradesh with a Rs. 3 billion investment. The company aims to produce 10,000 EV DC chargers annually and plans to establish 5,000 charging stations.

Graphite India Ltd

Providing graphite electrodes for EV batteries, Graphite India invested Rs. 50 crore in Godi India for a 31% stake. Godi India focuses on sustainable battery technology, including lithium-ion and solid-state batteries.

Exide Industries Ltd

Renowned for battery manufacturing, Exide Industries is now producing EV-specific batteries. The company is investing ₹60 billion to establish a 12 GWh Li-Ion cell plant.

JBM Auto Ltd

A leading electric bus manufacturer, JBM Auto also operates EV charging sites for cab aggregators across major Indian cities.

Tata Motors Ltd

A frontrunner in India’s EV market, Tata Motors has launched several electric models and expects sales to reach 65,000-70,000 units in 2024. The company aims to introduce EVs with a 600 km range.

Amara Raja Batteries Ltd

Expanding into the EV sector, Amara Raja focuses on lithium cells and EV chargers. The company is setting up a lithium-ion cell and battery pack plant in Telangana with a Rs. 95 billion investment.

Hero MotoCorp Ltd

Hero MotoCorp plans to launch three electric two-wheelers in FY 2025 and has partnered with Ather Energy to create India’s largest fast-charging network.

Mahindra and Mahindra Ltd

Mahindra is investing in next-generation EV technologies and aims to transition 30% of its manufacturing to EVs by 2027.

KPIT Technologies Ltd

KPIT introduced groundbreaking sodium-ion battery technology, promising cost-effective and rapid vehicle charging solutions.

Maruti Suzuki India Ltd

Set to enter the EV market with an electric hatchback by 2026-2027, Maruti Suzuki aims to make EVs more affordable and plans to reach half a million annual sales by FY 2031.

Hindalco Industries Ltd

Investing Rs. 8 billion to establish a battery aluminum foil manufacturing facility, Hindalco aims to serve the EV market with sustainable aluminum products.

Motherson Sumi Wiring India Ltd (MSUMI)

Leading the wiring harness industry, MSUMI has launched a dedicated line for high-voltage harnesses for EVs and hybrids.

Vedanta Ltd

Vedanta Aluminium contributes to the EV sector with its low carbon aluminum products, supporting the industry’s growth.

Ashok Leyland Ltd

Ashok Leyland’s electric LCVs have received significant bookings, and the company is investing in Switch Mobility to enhance its EV offerings.

Tata Chemicals Ltd

Playing a crucial role in the Tata Group’s EV ambitions, Tata Chemicals is setting up a lithium-ion cell manufacturing unit with an investment exceeding Rs. 10,000 crore.

Greaves Cotton Ltd

Greaves Electric Mobility has made significant strides in the EV industry with its “Ampere” brand and partnership with ElectricPe for EV financing solutions.

Electric vehicles growth in India

Once a distant dream, electric vehicles have become one of the fastest-growing segments in India’s automotive sector. In 2023, EV sales surged by 82%, reaching 1,39,789 units in March alone. The fiscal year 2023 saw a 157% growth in overall sales, driven predominantly by electric two-wheelers. The electric four-wheeler market is also rising, with Tata Motors leading the space. The overall EV market is expected to grow by 49% annually by 2030, with sales potentially crossing 17 million annually in the next seven years.

Advantages of investing in EV stocks

Investing in the EV sector offers numerous benefits:

• Growth potential: Significant expansion potential driven by environmental concerns, technology advancements, and supportive policies.
• Government incentives: Tax rebates, grants, and subsidies boost demand and profitability.
• Technological innovations: Leading in battery technology, autonomous driving, and connectivity.
• Environmental impact: Aligns with global sustainability goals and reduces pollution.
• Market diversification: Includes automakers, battery manufacturers, and infrastructure providers.
• Regulatory support: Benefits from stricter emission standards.
• Early-mover advantage: Higher gains by entering the market early.
• Consumer adoption rates: Growing consumer base drives sales and stock prices.

Risks associated with investing in EV stocks

While promising, investing in EV stocks carries several risks:

• Technological obsolescence: Rapid technological advancements could render existing technologies outdated.
• High competition: Intense competition can pressure profit margins and market share.
• Regulatory and policy changes: Changes in government incentives and regulations can impact profitability.
• Supply chain volatility: Fluctuations in raw material availability or price can affect production.
• Market valuation concerns: Inflated valuations can lead to volatility and price corrections.
• Infrastructure adequacy: Insufficient charging infrastructure can stifle EV adoption.
• Consumer adoption rates: Factors like cost and performance affect consumer adoption rates.
• Financial sustainability: Startups operating at a loss need strong financial health for growth.

Japanese automotive manufacturers have earned global acclaim, blending a rich history of improvement, innovation, and a commitment to quality. Post World War II, Japan’s dedication to rebuilding its economy manifested through a pivotal automotive industry that embraced lean manufacturing, resulting in reliable, fuel-efficient, and affordable vehicles. This dedication to excellence, coupled with technological advancements and a customer-centric approach, propelled Japanese car brands to the forefront of the global automotive stage.

1. Toyota: Pioneering Excellence Since 1937

Toyota, a cornerstone of the Japanese automotive industry, has etched its name in history through a commitment to quality and continuous improvement. Established in 1937, Toyota’s innovative approach gave rise to the Toyota Production System, emphasizing efficiency and reliability. Iconic models like the Corolla, celebrated for affordability and durability, and the Camry, known for comfort and reliability, showcase Toyota’s diverse success. The introduction of eco-friendly technologies, exemplified by the Prius hybrid, further solidifies Toyota’s global impact.

2. Lexus: Crafting Luxury and Innovation Since 1989

Launched in 1989 as Toyota’s luxury division, Lexus swiftly emerged as a global powerhouse. Lexus focused on rivalling established luxury brands through meticulous craftsmanship and attention to detail. The LS sedan and the RX SUV, with their refinement and cutting-edge technology, exemplify Lexus’s commitment to luxury and innovation. The hybrid ES and LS models showcase Lexus’s dedication to environmentally friendly alternatives in the luxury segment.

3. Nissan: A Dynamic Presence Since 1933

Founded in 1933, Nissan has played a pivotal role in Japan’s automotive landscape. Acquiring the Datsun brand in the 1930s, Nissan gained global recognition. Iconic models like the Z sports car, celebrated for performance and style, and the Nissan GT-R, renowned for speed and precision, showcase Nissan’s dynamic presence. The Nissan Rogue, a popular crossover SUV, reflects Nissan’s commitment to versatility and practicality on a global scale.

4. Honda: Engineering Excellence Since 1948

Honda’s indelible mark on the global automotive scene began in 1948 as a motorcycle manufacturer before expanding into automobiles. The Honda Civic, a compact car celebrated for fuel efficiency and reliability, and the Honda Accord, known for comfort and performance, are testaments to Honda’s engineering excellence. The CR-V, a versatile and spacious SUV, further contributed to Honda’s soaring popularity worldwide.

5. Mitsubishi: Innovation, Technology, and Durability

Established in 1970, Mitsubishi Motors Corporation boasts a rich history with roots tracing back to the early 20th century. Popular models like the Mitsubishi Lancer, celebrated for performance and versatility, and the Mitsubishi Pajero, a robust and capable SUV, highlight Mitsubishi’s commitment to innovation and durability. With a global presence, Mitsubishi has consistently embraced advanced technology to cater to diverse automotive needs.

*Disclaimer: The information presented is based on available data and market trends as of 2023. Prices and features mentioned are indicative and may vary based on factors such as location and variant specifications. Always refer to the official websites of the respective companies for the most accurate and updated information.*