Hyundai Motor India IPO: Hyundai IPO is the mother of all IPO in India, which is all set to open next week on both BSE and NSE's primary market for bidding. The price band has been fixed. The majority of experts are recommending Subscribe to the IPO, with a positive outlook for a long-term basis. Post the IPO, Hyundai is expected to list on BSE and NSE, while would rival behemoths like Tata Motors and Maruti Suzuki.
Hyundai IPO Details:
The third largest OEM, Hyundai will launch its Rs 27,870 crore IPO, the largest ever in the Indian IPO market, on Tuesday, October 15, 2024, while the bidding for the IPO will close on Thursday, October 17, 2024.
Anchor investors will be allowed to bid on Monday, October 14, 2024.
The price band for the IPO is fixed at Rs 1,865 to Rs 1,960 per equity share, on the face value of Rs 10 each. Bids can be made for a minimum 7 equity shares and in multiples of 7 equity shares thereafter.
The South Korean-based company's initial public offer comprises of offer for sale (OFS) up to 42,194,700 Equity Shares by the promoter Hyundai Motor Company. Accordingly, Hyundai will not receive any proceeds from the IPO.
Of the total size, 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs"), while 15% of the offer will be reserved for Non-Institutional Investors (NIIs), and remaining 35% will be allocated to Retail Individual Investors (RII).
Tentatively, after the IPO, the basis of allotment is expected to take place on October 18, while refunds and credit of shares are expected on October 21. Hyundai IPO is expected to list on October 22, 2024.
Companies like Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, J.P. Morgan India Private Limited and Morgan Stanley India Company Pvt Ltd are the book-running lead managers of the IPO. Additionally, Kfin Technologies Limited is the registrar.
Should You Subscribe to Hyundai IPO?
In its IPO note, Mirae Asset Capital Markets said that to accommodate future demand, HMIL is undertaking a phased expansion of its production capacity, targeting a total capacity of 1.07 million units annually by the end of 2028.
Meanwhile, in the electric vehicle segment, Mirae Asset's note stated that the automaker has initiated its market presence with the launch of the BEV (Ioniq), its flagship premium EV offering. Further, HMIL is expected to introduce the Creta EV by the end of FY25, aimed at capturing a broader consumer demographic. The company is also establishing a dedicated EV supply chain and charging infrastructure to support its long-term EV strategy.
On the financial metrics, Mirae's report said, "HMIL exhibits superior operating margins relative to its closest competitor. At the upper price band of INR 1,960, HMIL is priced at a PE of 26.3x FY24 EPS, in comparison to Maruti Suzuki Ltd., which trades at 30.8x FY24 EPS."
Moreover, in its IPO note, LKP Securities said "We believe it is the second best player to play as a proxy to the Indian PV theme along with the likes of Maruti Suzuki. The company has about 15% market share on the back of 68% share coming from the SUVs, while >20% share coming from exports. Its revenues are growing along with the industry in India and have strong return ratios as well. Its EBITDA margins at 13.8% in Q1 FY25 are best among the industry. The current capacity utilization of HMI's plants is ~100%, due to which in near future the company may not be able to cater to the demand."
However, LKP's note also said, "Since the PV industry is slightly in a slow lane currently, this may augur well for the company, as HMI is expanding its capacity by 30% in the next 2 to 3 years. With new model launches (4 in mid-term, including the new Creta EV), HMI should give a strong fight to its rivals. At the upper end of the price band, on FY 24 earnings, the stock should trade at 26x times which is a fair value as compared to its closest peer Maruti Suzuki (29x FY 24 earnings). Therefore, on all favourable parameters, we assign a SUBSCRIBE rating on the stock. We recommend investing in this stock over the long term for higher returns."
Hyundai is the second largest passenger vehicles player in India auto market, while third largest player internationally according to sales volumes. It has been in the Indian markets for almost three decades and has gone through the ups and downs of the industry. HMI is a well-entrenched player in India with almost equal penetration in rural as well as the urban markets. They have been launching the iconic brands in India and are present strongly in each and every engine type of cars.
Hyundai IPO GMP Today:
Hyundai Motor IPO last GMP is ₹75, last updated Oct 11th 2024 11:00 PM. With the price band of 1960.00, Hyundai Motor IPO's estimated listing price is ₹2035 (cap price + today's GMP).The expected percentage gain/loss per share is 3.83%, as per Investor Grain.
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