Hyundai Motor India IPO: Schedule and Pricing
Hyundai Motor India is poised to launch its Initial Public Offering (IPO) on Tuesday, October 15, with subscription closing on Thursday, October 17. The IPO aims to offer investors an opportunity to participate in one of the most anticipated public issues in the market. As a preview, the allocation details to anchor investors will be disclosed on Monday, October 14.
The IPO price band has been set between ₹1,865 and ₹1,960 for each equity share, with a face value of ₹10, making it an attractive investment option for various stakeholders looking to bolster their portfolios.
About Hyundai Motor India
Founded in May 1996, Hyundai Motor India Limited operates as a subsidiary of Hyundai Motor Group, recognized as the world’s third-largest original equipment manufacturer (OEM) in passenger vehicle sales. The company is known for producing and marketing high-quality, technologically advanced passenger vehicles, which include saloons, hatchbacks, SUVs, and electric vehicles (EVs).
Hyundai’s manufacturing facility, located near Chennai, boasts the capacity to produce its full spectrum of vehicle models. With a robust lineup that includes popular models like the Grand i10 NIOS, i20, Elantra, Venue, Creta, Alcazar, and the all-electric SUV Ioniq 5, Hyundai continues to cater to diverse consumer preferences.
Global Reach and Impact
The company’s reach extends beyond India, with exports to Africa, the Middle East, Bangladesh, Nepal, Bhutan, and Sri Lanka. As of March 31, 2024, Hyundai Motor India has successfully sold nearly 12 million passenger vehicles within the Indian market and through its export channels, underscoring its significant role in the automotive landscape.
Grey Market Premium (GMP) Insights
As we approach the IPO launch, the current Grey Market Premium (GMP) for Hyundai Motor India is reported at ₹165. This premium suggests that shares are being traded at a value higher than the issue price, giving potential investors an optimistic outlook on their shares’ performance upon listing.
Considering the upper limit of the IPO price band and the current GMP, analysts estimate that shares may list at approximately ₹2,125 each, translating to a potential increase of 8.42% over the IPO’s higher price. However, the GMP has shown some volatility, with a historical range from ₹0 to ₹570 in recent sessions.
IPO Structure and Underwriters
The imminent IPO involves an offer-for-sale of 14.2 crore equity shares by Hyundai Motor Company’s promoters. It is important to note that there will be no fresh issue component in this IPO. Renowned merchant bankers including Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), JP Morgan India, and Morgan Stanley India Company are managing the IPO process, with KFin Technologies acting as the registrar.
Market Sentiment and Analyst Opinions
Aequitas Investments and other analysts have expressed a cautious outlook on the IPO, citing potential valuation mismatches and broader sector challenges as significant risk factors. As the global automotive industry faces various headwinds, investor sentiment may not lean favorably towards the IPO when considered against current market dynamics.
Despite the challenges, the valuation implications are notable, with Hyundai’s Indian unit expected to be valued at approximately 42% of its parent company’s market capitalization, a reflection of its contribution to the global revenue and profitability landscape.
On the other hand, Nuvama Institutional Equities suggests a sustainable growth trajectory, projecting a 5% compound annual growth rate (CAGR) for Hyundai’s profit after tax (PAT) over the upcoming fiscal years, further enhancing the intrigue surrounding this IPO.
Conclusion: A Thoughtful Investment Opportunity
The Hyundai Motor India IPO represents a significant moment in the Indian equity market. As potential investors weigh the risks against the projected benefits, it is crucial to assess personal investment strategies and market conditions. The evolving landscape of the automotive industry, coupled with Hyundai’s established presence, continues to present both formidable opportunities and challenges.
