Hyundai Motor India Ltd has received approval from the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO), aiming to raise $3 billion at a valuation of $20 billion. This IPO will involve an offer-for-sale of 142 million shares, representing a 17.5% stake by Hyundai Motor Company. India has become Hyundai's third-largest revenue source after the U.S. and South Korea, with the company having already invested $5 billion and planning an additional $4 billion over the next decade [55317358].
Despite these strengths, Hyundai faces significant challenges in the Indian automotive market. The company's market share has decreased from 17.5% to 14.6% over the past four years, primarily due to increased competition from Tata Motors and Mahindra & Mahindra. Tata Motors is planning a substantial ₹9,000 crore investment in a new facility, while Mahindra is considering acquiring a stake in Skoda-Volkswagen [55317358].
Hyundai's sales figures reflect both growth and challenges; used car sales surged by 79% from FY21 to FY24, while new car sales increased by 30%. However, the company is also contending with a challenging automotive market, with only 3% growth expected in FY25 [55317358].
In addition, Hyundai's focus on electric vehicles (EVs) is hindered by inadequate infrastructure and fierce competition. The company has faced criticism regarding its after-sales service and quality issues, which could impact customer loyalty and brand perception. Former Hyundai India President BVR Subbu has expressed concerns about the company's future in the hybrid market, indicating that the road ahead may be fraught with challenges [55317358].
Amidst these developments, Hero Motors has filed draft papers with SEBI for a ₹900 crore IPO, which includes a fresh issue of equity shares worth ₹500 crore and an offer for sale component valued at ₹400 crore. This move underscores the growing interest in the electric vehicle sector in India, as companies seek to capitalize on the increasing demand for sustainable transportation solutions [cdf4ea37].