The Hyundai Initial Public Offering in India is all set to go live and creating much noise. This IPO is pretty much one that investors, analysts, and the public pay heed to.
Hyundai’s move to tap the Indian market by going public is the most critical that the company has ever taken. What is important here is the emphasis on Hyundai’s strong presence in the Indian market and the growth potential of the automobile sector.
The article tries to trace Hyundai’s reasons for choosing India for its IPO, its effect on the company and investors, and what the future holds.
Why Hyundai Chose India for its IPO
Hyundai has been one of the flagships in India for nearly two decades. The firm commands over 17% market share in the country and ranks as one of the largest automobile manufacturers in India. The Indian automobile space is booming with rising incomes and urbanisation, and Hyundai stands ready to cash in on this boom.
Here are the key reasons why Hyundai chose India for its IPO:
Growing Economy:
The Indian economy is growing fast. Its large youth population needs more personal vehicles. For long-term growth, Hyundai needs to utilise this market.
Auto Demand is on the rise:
More people are shifting to cities and thus demanding vehicles. Since Hyundai produces and sells popular models like Creta and i20, it should take this opportunity as well.
Investment in Electric Vehicles (EVs):
India is only becoming increasingly focused on sustainable transport, and Hyundai is actually one of the companies that has already been a leader in the EV space. I think it makes total sense to do this now when they can raise money for this expansion.
Local Operations Strengthening:
Hyundai wants to increase its local production so that it doesn’t rely too much on imported parts. The IPO will strengthen this.
How Does Hyundai’s IPO Affect It?
The effects of Hyundai’s IPO will be felt not only at the company level and that of its investors but also in the Indian market.
For Hyundai:
They can increase investment in new technologies, especially for electric and hybrid vehicles. Hyundai can also expand its production which would enable them to minimize imports.
For Investors:
Hyundai is a well-known and well-established brand with a good track record. Therefore, investors looking for long-term growth, especially in the EV segment, will find Hyundai’s stock quite alluring.
For the automobile industry
The Hyundai IPO will set a trend for other companies to follow. Additionally, more investment would be observed in the burgeoning EV infrastructure of India.
For the Stock Market:
The IPO will attract local as well as global investors. This can increase the liquidity of the Indian market and, therefore, attract other foreign companies.
Possible Risks
Hyundai IPO is thrilling, but risk cannot be ignored.
Market Fluctuation:
Business planning in the stock market is unpredictable. Fuel prices may surge, and consumer demand may slump. These issues can also impact Hyundai’s performance.
Competition:
The company is witnessing severe competition from Maruti Suzuki, Tata Motors and the new entrants of EVs. Hyundai needs to maintain a competitive edge that brings smiles to investors’ faces.
The policies regarding India’s emissions and electric vehicles will go a long way in deciding the future growth of Hyundai. Some significant policy changes can have a very intense impact on its growth plans.
Bottom Line for Investors
Bottomline
Risks exist, but considering Hyundai’s market presence, electric vehicle plans, and new Indian green transport policies, this should be an interesting IPO to follow. Keep an eye on Hyundai as it shapes the future of the Indian automotive industry.