Hyundai IPO Listing: Broker Emkay Gives Reduce Rating On India's Biggest IPO; What Is The New Target Price?

Hyundai IPO Listing: The Mother Of All IPOs in India has made a discount listing of 1.47% on BSE on Tuesday, October 22, 2024, opening at Rs 1931 apiece on the exchange, compared to its issue price of Rs 1,960 apiece. Amidst the bearish trend, Hyundai IPO has received its first rating from brokerage Emkay Global. The broker has given REDUCE rating with target price lower than even listing price, meaning they are expecting further correction.

Hyundai IPO Listing Snippet:

The second largest passenger carmaker listed at Rs 1,931 apiece, at a discount of 1.47% from its IPO issue price of Rs 1,960 apiece. The stock price ended at Rs 1820.40 apiece, down by 5.73% from its listing price. But nosedived by a massive 7.12% from its IPO price.

In its latest report, Emkay Global said, "We initiate coverage on Hyundai Motor India (HMIL) with REDUCE (TP of Rs1,750, at ~23x core Sep-26E PER, similar to MSIL) amid a lackluster ~5% EPS CAGR over FY24-27E. HMIL has established a strong franchise in India; however, lack of major launches (key growth driver historically in PVs) over the next 12-18M, muted ~5% capacity CAGR, higher royalty, and lower treasury income are likely to restrict EPS growth."

Emkay's note added, "While MSIL (REDUCE) also faces similar near-term growth challenges, we prefer it over HMIL given its catch-up on operational and financial metrics (even on lower SUV mix) with a much diversified product and powertrain mix and a higher growth optionality (potential small-car recovery, aggressive 8% capacity CAGR, 7-seater SUV launch in H2FY26E, and 10 new models by 2030) driving a superior 6%/10% revenue/EPS CAGR over FY24-27E."