Hyundai IPO Could Hit D-Streets Before Diwali: Check Risk Factors

SEBI has given a green signal to the country's second-largest carmaker for an initial public offering, which could possibly be the biggest in the history of the Indian stock market. The brand is all set to offer a total of 14.2 crore shares at a face value of Rs 10 each. Interestingly, this is roughly a 17.5 per cent stake of the company, as mentioned in the draft red-herring prospectus that Hyundai filed with the market regulator in June. With this listing, the South Korean carmaker's Indian arm with possess a valuation of just half of its parent company's in Seoul, Korea, which stands at $47 billion.

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Here are the risk factors mentioned in the Hyundai India IPO's DHRP (Draft Red-Herring Prospectus):

1. A limited number of suppliers for parts and materials means that any disruption in their availability could negatively affect operations.
2. Rising costs of parts and materials could negatively impact business operations and financial results.
3. Ongoing legal proceedings and any unfavourable outcomes could negatively affect our business, reputation, financial condition, and operational results.
4. We rely on Hyundai Motor Co., our promoter, for our business operations. Any negative shift in our relationship with HMC or other companies within the Hyundai Motor Group could negatively affect our business, reputation, financial health, and operational results.
5. Kia Corporation and Kia India Pvt., two of our Group companies, operate in the same industry, which may lead to conflicts of interest.
6. Related party transactions with HMC and other companies within the Hyundai Motor Group could present potential conflicts of interest.
7. Possible disruptions at the Chennai manufacturing plant may affect business operations, while the commencement of operations at the Talegaon Manufacturing Plant could pose additional challenges.
8. Our long-term competitiveness is closely tied to the growth of the EV market and the adoption of alternative fuels in India. Failure to anticipate these trends and cater to customer demand for EVs could negatively affect our operations.
9. Any decrease in the demand for or disruption in the manufacture of SUVs, or any other passenger vehicle models we rely on in the future.
10. Any interruptions in our dealership and distributorship network for passenger vehicle sales or service delivery, including after-sales support, could negatively impact our business operations.