2024.10.23
Hyundai Motor makes landmark stock debut in India
By Byun Hye-jin, The Korea Herald - Hyundai Motor
India made a monumental debut on the Indian stock market, marking the largest
initial public offering in India’s history and the first overseas subsidiary of
a Korean company to go public in global markets.
Hyundai Motor Group Executive Chair Chung Euisun and
key executives, including Chang Jae-hoon, president and CEO of Hyundai Motor
Company; Kim Un-soo, vice president of Hyundai Motor India; Tarun Garg, chief
operating officer at Hyundai Motor India; and some 250 people from the Indian
stock exchange and global media participated at a listing ceremony held at the
National Stock Exchange in Mumbai earlier in the day.
The ceremony started with a traditional Indian lamp
lighting, followed by Chung ringing the opening bell to celebrate the listing
of the Indian subsidiary on the stock exchange.
“Hyundai Motor India has become an integral part of
India since its foray into the market,” said Chung during the event. “We
recognized early on that India represents the future, so we have consistently
increased our investments, expanded our research and development capabilities,
and created over 250,000 jobs.”
Chung added, “Moving forward, the company will
continue to adopt the highest governance standards, making prudent and
transparent decisions through its board of directors. We remain committed to
boosting localization, founded on the spirit of cooperation and mutual growth.
Our efforts to pioneer future technologies will continue here in India.”
Hyundai Motor India’s stock was listed at 1,934 rupees
($23) on the National Stock Exchange at 10 a.m. local time. Compared to its
issue price of 1,960 rupees, the shares initially rose 1.9 percent to 1,970
rupees but then saw a sharp decline of 5.9 percent to 1,844 rupees earlier in
the day. It further dropped 7.1 percent to 1,820 rupees at the closing bell.
Seven of the country’s largest IPOs, including Hyundai
Motor India and Life Insurance Corporation of India, reported losses during the
listing day ranging up to 27 percent, according to data from Dealogic.
The IPO price for the Indian subsidiary was determined
at the upper end of the price band. Retail investors were lukewarm during the
subscription period from Oct. 15 to 17 due to concerns over a slowdown in the
automotive industry. However, it attracted aggressive biddings from
institutional investors, leading to an oversubscription of 2.39 times. The IPO
raised approximately $3.3 billion, valuing the company at $19 billion.
Already the second-largest carmaker in India,
following Japan’s Maruti Suzuki, Hyundai Motor Group is betting big on India to
make it a strategic export hub as part of its expansion into emerging markets,
such as the Middle East, Africa, South and Southeast Asia, and Latin America.
With a population of 1.4 billion, India is emerging as
a critical mobility market. Last year, the Indian automotive market reached 5
million units, ranking third after China and the US. The number of passenger
cars, which accounted for 4.1 million units, is expected to surpass 5 million
units by 2030. Additionally, the Indian government has set a goal to increase
EV sales to 30 percent of total vehicle sales by 2030.
With the capital raised from the stock market, the
auto giant plans to ramp up investments in its local auto plants,
electrification, and research and development in advanced automotive
technologies.
Once Hyundai Motor’s third plant in Pune, Maharashtra,
is completed next year, the company, along with its affiliate Kia, will be
operating four car manufacturing plants in India. By 2028, the annual
production capacity is expected to surpass 1.5 million units.
Hyundai Motor and Kia also demonstrated a strong
commitment to begin mass production of electric vehicles in the country that
has a growing interest in clean mobility. Hyundai plans to launch its first
locally produced EV, the electrified version of the popular sport utility
vehicle Creta, in January next year, to complete five EV lineups by 2030.
Similarly, Kia will start production of its first locally-made EV next year and
aims to introduce four EV models by 2030.
Hyundai Motor Group is also accelerating the adoption
of advanced technologies to the cars sold in India such as connectivity,
Over-the-Air updates, V2X communication, Advanced Driver Assistance Systems and
digital keys, to strengthen its premium image.
To secure a competitive edge in EV pricing, Hyundai
Motor is working on localizing the production of key components such as battery
cells, battery packs and EV power systems. A new battery pack production
facility is being built at Hyundai's Chennai plant and production of locally
tailored EV models will begin early next year. Hyundai also plans to expand EV
charging stations with its extensive sales network.
Additionally, Hyundai Motor has further strengthened
its collaboration with the Tamil Nadu state government to improve the EV
ecosystem. Last year, Hyundai and Tamil Nadu signed a memorandum of
understanding to invest in green mobility and modernization of production
facilities over the next decade. This includes setting up a battery pack
assembly plant, expanding the EV model lineup, and installing 100 fast chargers
at key locations in the state.
As for research and development, the carmaker will
boost its global innovation capabilities through continued collaboration
between its technical center in Hyderabad, Telangana State, and its Namyang
R&D Center in Gyeonggi Province, Korea.
Experts say India will serve as one of the key global
strategic bases for Hyundai Motor.
“Given that China’s protectionist policy is making
foreign companies face huge challenges in conducting business there, India
could be the ‘next China’ for the carmaker,” noted Kim Pil-su, a car
engineering professor at Daelim University. “Also, due to the ‘Make in India’
policy, Hyundai is (on some level) forced to boost manufacturing within the
country and localize car parts to avoid hefty tariffs.”
Although it may take some time to accelerate EV sales
due to its price hurdle, if the carmaker receives the Indian government’s
subsidies and expands clean mobility infrastructure, claiming the top position
in the clean mobility market will only be a matter of time, added Kim.
Source: https://www.koreaherald.com/view.php?ud=20241022050715