Hyundai made its debut on the Indian Stock Exchange and although its shares saw teething troubles, driving on D-Street could indicate bigger ambitions for it.
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Hyundai Motor India made its debut on the Bombay Stock Exchange (BSE) on Tuesday. The largest public offering in the history of the country, shares closed that day 1,820, down from the listing at 1,931 per share. But for a company that has called India home for nearly three decades, estimating the starting fare on D-Street may be like jumping the proverbial gun.
This list is very valuable The Rs 27,870 crore investment by parent company Hyundai Motor Company by selling its 17.5 per cent stake in HMIL through IPO (initial public offering) has been the talk of the town. The report sheds light on how the company spent ₹624 crore (2.24 per cent of the issue size) in various fees for listing on Indian stock exchanges. Almost equal amounts of enthusiasm and caution were evident from potential investors, even as many analysts pointed to the long-term value of the Hyundai IPO rather than quick profits.
And this potential long-term value can probably be estimated from Hyundai's mega plans for the Indian car market.
Hyundai will increase production capacity
Hyundai officially started its India journey with a massive plant near Chennai. Operations here began in September 1998 and over the next several years, popular models such as the Santro, i10 and Xcent rolled off the manufacturing lines. Sriperumbudur The facility still remains the largest manufacturing center for the company, serving as a manufacturing base for both domestic and overseas markets.
But to head off growing competition, the country's second-largest carmaker (after Maruti Suzuki) also acquired a facility in Talegaon, near Pune, which was previously owned by General Motors. Operations are scheduled to begin next year with company officials confirming the investment. Here Rs 6,000. “Our current capacity is 8.24 lakh units per annum. With the acquisition of the Talegaon plant, our capacity will be added by 2,50,000 units, which will come in two phases – 1.70 lakh units next year and 80,000 units by 2028,” said Tarun Garg, Chief Operating Officer, Hyundai Motor India.
Hyundai is looking to increase its production capacity by 30 percent from the current level by 2028. Garg says this will allow the company to grow at a faster pace than the overall industry while striking a balance between growth, profitability and market share.
look at electrical power
Hyundai's fortunes in its early India years were driven by the popularity of its smaller models like the Santro and i10. Over the past decade or so, the performance of the Creta and Venue models has underlined how the company has understood the changing preference towards SUV body types. Garg says that SUV models contribute about 68 percent to Hyundai's total sales in the country.
But relying on body type alone may not be enough in the changing world of the Indian and global automotive landscape. And Hyundai is aware of the changes the electric movement is bringing.
Currently, Hyundai is a marginal player in the Indian electric vehicle (EV) sector, offering the capable but premium Ioniq 5. Tata Motors, a formidable rival, has a number of recently launched models ranging from the Tiago EV to the Nexon EV and more. Curvav e.v. These models can be priced anywhere 8 lakh more 22 lakh (ex-showroom), and cut across different body types.
But the fight continues with Hyundai confirming the launch of the Creta EV in 2025. After this, four more EV models will be launched by 2030. While critics may argue that the Koreans are late to the game, Hyundai is not willing to leave any stone unturned. And while the EV revolution is well and truly underway in India, it is not yet driven by four-wheelers but instead by two-wheelers.
Is localization the real mantra?
Hyundai is one of the largest car manufacturers in the country and is also the largest car exporter from here. Its offerings mostly come feature-loaded which top the priority list of potential customers. Local manufacturing has helped in this regard but will the same formula work for the Hyundai EV?
The company plans to set up a battery plant in Chennai at a cost of approximately Rs 700 crore with the stated aim of localizing battery packs to wage a price war against more established EV players in the market. The plant will initially have a capacity of 75,000 battery packs per year and this figure is likely to increase further.
On paper, Hyundai is committed to playing stronger than ever in India. Perhaps, there is also tacit acceptance of growing rivalry. But with ICE (Internal Combustion Engine) models as well as upcoming mass-market EVs, the company is bracing itself for a major strike. And the ultimate fate of Hyundai's shares will directly depend on this.
(with agency input)
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First publication date: 23 October 2024, 09:51 am IST