Hyundai India To Announce Dividend Policy After FY25, Says COO Tarun Garg

Hyundai Motor India Ltd. will announce a new dividend policy after fiscal 2025, according to Tarun Garg, chief operating officer of the company. Speaking on the opening day of the company’s highly anticipated initial public offering, Garg noted the company’s focus on balancing shareholder returns and reinvestment for growth. 

"If we take into account the returns, cash position, capex requirement, but most importantly we’d like to benchmark with the industry best practices and look at the shareholders returns very closely," he said. 

The IPO, the largest globally in 2024, opened for subscription on Tuesday and had been subscribed 0.08 times, or 8% as of 11:09 a.m. The company plans to raise up to Rs 27,870 crore, marking India’s biggest IPO since Life Insurance Corporation’s Rs 21,000 crore offering in 2022.

“Our parent company is well-placed with a range of alternate powertrains, including electric, hybrid, and hydrogen, which positions us strongly for the future. The new dividend policy will align with industry best practices and the company’s capital needs for further growth,” he said.

Garg said how the IPO marks the second phase of Hyundai Motor India's growth story, presenting opportunities for both local and global investors. "We are the second-largest player in the passenger vehicle segment in India, and this IPO is a key milestone in our growth journey,” he said.

He also expressed satisfaction with the response from anchor investors, particularly local mutual funds, which accounted for 31.4% of the anchor book. "This is a strong endorsement of our strategy to localise our operations further," Garg noted.

Hyundai, India’s second-largest passenger vehicle manufacturer, sees India as a critical market, ranking third globally for the company, behind the US and Korea. Garg explained that the company is well-positioned to increase production and meet growing demand. 

"We currently have a production capacity of 8.24 lakh units, and with the addition of our Pune plant, another 2.5 lakh units will be added, providing us with significant headroom for both domestic and export growth," he said.

The company is also preparing to expand its Electric Vehicle offerings. "We’d like to compete in the high-volume EV space, and Creta, one of our strongest brands, will enter the EV market in the next quarter. This will be followed by three more EV models in the mid-term, all backed by strong localisation, including the local manufacturing of lithium iron phosphate or LFP cells with an Indian partner," Garg noted.

On the business front, Garg mentioned how the listing would enhance Hyundai’s ability to engage with retail investors and align with global standards. 

"Post-IPO, quarterly calls will allow us to communicate better with our audience and investors. This will also help us further pursue operational excellence and governance," he said. 

Hyundai expects the IPO to strengthen its market positioning and drive innovation in the automotive space.

Hyundai’s success in the SUV segment has been a key factor in its market leadership, the COO said. 

"In 2015, SUVs contributed just 13% to total sales, but the launch of Creta changed that. Today, SUVs contribute 52% to India’s total sales, and for Hyundai, it stands at 67%," Garg shared. 

He credited Hyundai’s success to its respect for the Indian market and its focus on raising the bar in terms of technology, features, and design.

"This IPO will enable us to grow further, both in India and globally, and we can only go up from here," Garg said.