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India will be the first country for Hyundai Motor Corporation (HMC) to list a subsidiary outside Korea.
New Delhi: Country’s second largest carmaker Hyundai Motor India Limited (HMIL) aims to be the most “trusted” car brand of the country, said a top company official, ahead of its upcoming initial public offering (IPO). The company has been operating in India for over 26 years now.
“We want to be the most trusted brand in India. We will focus on sales and profitability with volume products and dealer networks,” Unsoo Kim, Managing Director of HMIL said.
“We have projected HMIL as the global hub of exports for emerging markets. Our efforts towards growth and expansion have resulted in industry leading margins and returns,” he said.
The Indian arm of South Korean automaker Hyundai plans to raise INR 27,870 crore, through an offer for sale. The IPO will be open for public subscription from October 15-17. Anchor investors will bid on October 14.
“Now is the right time to take the next step and further Indianise our operations. This is a big step in the second phase of our growth story,” Tarun Garg, COO, Hyundai Motor India said.
India will be the first country for the parent company Hyundai Motor Corporation (HMC) to list a subsidiary outside Korea. HMIL pays the parent a 3.5% royalty on annual sales, consistent with the royalty rates paid by other global subsidiaries of HMC.
Wangdo Hur, CFO, HMIL noted that the royalty rate will be maintained at 3.5% for a “long time”, unless there are changes to the Organisation for Economic Co-operation and Development (OECD) guidelines on transfer pricing.
EV Game Plan
Currently, Hyundai India offers just one electric model– Ioniq 5. To expand its EV portfolio, the carmaker plans to launch the Creta EV in Q4 FY25. This will be followed by three more models in the mass and premium segments.
“We are localising the EV supply chain including cell manufacturing and investing in charging infrastructure,” Kim said. For this, HMC has joined hands with Exide Energy Solutions Limited (EESL), a subsidiary of Kolkata-based battery manufacturer Exide Industries.
As part of its growth strategy, HMIL will invest INR 32,000 crore in its Chennai and Pune plant over the next 8-10 years. This will increase its annual capacity for domestic and exports from 8.24 lakh units to about 1.1 million.
When asked about introducing HMC’s luxury brand Genesis in India, Garg said that it is doing well globally. “It is part of our long term plan, but not as of now.”
India is currently HMC’s third largest market after the US and Korea.
- Published On Oct 12, 2024 at 08:35 AM IST
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