Hyundai India plans Rs 32,000 cr expansion, aims for 1.1 mn units by 2028

IPO-bound Hyundai India plans to invest in boosting production capacity, developing new products and platforms, and launching new models

Hyundai Motor India Ltd (HMIL), which is set to debut on Indian stock exchanges on October 22, has allocated Rs 32,000 crore for its expansion in India between 2023 and 2032, according to a report by Moneycontrol.

The Indian subsidiary of the South Korean automaker plans to invest in boosting production capacity, developing new products and platforms, and launching new models. The company is also focusing on strengthening its presence in the Battery Electric Vehicle (BEV) market.

According to the company’s Red Herring Prospectus (RHP), Hyundai has signed a memorandum of understanding (MoU) with the Tamil Nadu government for its Chennai manufacturing plant and offer letters with the Maharashtra government for its upcoming Talegaon facility. These agreements entail total investments of around Rs 32,000 crore, the report said.

 

Focus on production capacity

Hyundai Motor India’s Managing Director and CEO, Unsoo Kim, had earlier said that Rs 26,000 crore would be allocated to the Chennai plant and Rs 6,000 crore to the Pune plant, increasing the company’s annual production capacity from 824,000 units to 1.1 million units by 2028. This expansion is expected to meet both domestic and export demands, the report mentioned.

The RHP also highlighted that the company’s historical and future capital expenditures are primarily focused on acquiring plant, property, equipment, and intangible assets for new passenger vehicle models.

“In the three months ended June 30, 2024 and 2023 and in financial years 2024, 2023 and 2022, our payment for acquisition of property, plant and equipment and intangible assets were Rs 5,590.72 million, Rs 5,355.84 million, Rs 32,462.08 million, Rs 22,609.82 million and Rs 12,649.79 million, respectively,” stated the RHP.

Hyundai India targets production growth

Hyundai India has set a production goal of 775,000 units for 2024, up from 765,000 units in 2023. The Pune plant, expected to begin operations in the latter half of 2025, will initially have a capacity of 170,000 units. In a second phase, production will increase by an additional 80,000 units, bringing the plant’s total capacity to 250,000 units, the report stated.

In addition to increasing its focus on Sport Utility Vehicles (SUVs), Hyundai has formulated an electric vehicle (EV) strategy with plans to introduce four battery-powered models in the medium term. These models will cover various segments, including a mass-market electric car, premium models, the Inster EV (which will compete with the Punch EV), and an electric version of the popular Creta SUV.

For the financial year ending March 2024, Hyundai India reported a total income of Rs 71,302 crore and a profit of Rs 6,060 crore, compared to an income of Rs 61,436 crore and a profit of Rs 4,709 crore in FY23.

Hyundai India: IPO details

On October 9, Hyundai India announced plans to launch the country's largest initial public offering (IPO), valued at Rs 27,870 crore, with a price range set at Rs 1,865 to Rs 1,960 per share. The IPO will open for public subscription on October 15 and close on October 17, while anchor investors will place bids on October 14.

The automaker aims to deepen its connection with India by listing on the stock market.

HMIL COO Tarun Garg had said that the IPO will give the company an opportunity to adopt global standards in areas such as excellence, operations, and governance, which are key advantages of going public.

He further said, “The brand Hyundai has really been accepted very well in India. We have been able to appeal to the Indian people generally. This is probably the right country to really go for the IPO.”