The much-anticipated Hyundai Motor India Limited (HMIL) IPO has officially hit the Indian stock market on October 22, 2024, with shares being listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). With an IPO price band set between ₹1865 and ₹1960 per share, Hyundai’s stock listing has generated moderate interest, and analysts predict a cautious debut. Let’s delve deeper into the key details, including expert ratings, market sentiment, financials, and future expectations.
Hyundai IPO: A Moderate Start Despite Grey Market Buzz
One of the key indicators that investors often rely on before an IPO listing is the Grey Market Premium (GMP). For Hyundai Motor India, the GMP did not spark a significant buzz, with the stock trading around 2% higher, a drop from the earlier 5%. However, this is still an improvement from the initial -3% trend seen in the earlier stages.
Despite the subdued GMP, the listing of Hyundai shares is expected to draw attention from various segments of the market. Hyundai Motor’s IPO has raised Rs 27,870.16 crores through an entirely Offer for Sale (OFS) of 14.22 crore shares, reflecting the company’s confidence in its brand and future growth.
Hyundai IPO Share Price Target and ‘Buy’ Rating
Nomura, a leading financial services firm, has provided a positive outlook for Hyundai’s stock. It has assigned a ‘Buy’ rating with a target price of ₹2,472 per share. According to Nomura, Hyundai’s robust market presence and consistent financial performance make it a promising long-term investment.
The IPO has received a mixed response from investors, with analysts suggesting a slow start but acknowledging Hyundai’s potential to perform well in the long term, especially given its dominance in the Indian automobile market and ambitious growth plans.
Hyundai Motor IPO Financial Performance
Hyundai Motor India Limited has shown strong financial growth in recent years. Between the financial year ending March 31, 2024, and March 31, 2023, the company’s revenue grew by 16%, while Profit After Tax (PAT) surged by 29%. Here’s a quick look at Hyundai’s financial performance:
- Revenue (March 31, 2024): ₹71,302.33 crore
- Profit After Tax (March 31, 2024): ₹6,060.04 crore
- Assets (March 31, 2024): ₹26,349.25 crore
- Net Worth (March 31, 2024): ₹10,665.66 crore
The company’s strong balance sheet, increasing profitability, and efficient cost management are all positive indicators for investors. Hyundai’s expansion plans are expected to further boost its revenue streams by 2026.
Key Details of Hyundai Motor IPO
Hyundai Motor India’s IPO had an application period from October 15 to 17, 2024, with allotment finalized on October 18. The IPO’s book-built issue type was well-structured to attract a wide variety of investors. Below are some of the key details for the IPO:
- Price Band: ₹1865 to ₹1960 per share
- Issue Size: ₹27,870.16 crore
- Offer for Sale (OFS): 14.22 crore shares
- Minimum Lot Size: 7 shares
- Retail Investment Minimum: ₹13,720
The IPO was subscribed 2.37 times, with the retail category seeing 0.50 times subscription and the Qualified Institutional Buyers (QIB) category receiving significant attention at 6.97 times.
Hyundai Motor’s Growth Strategy and Industry Leadership
Incorporated in 1996, Hyundai Motor India has grown to become the second-largest auto manufacturer in India, following its parent company Hyundai Motor Company, which is the third-largest auto Original Equipment Manufacturer (OEM) globally. Hyundai’s diversified product portfolio, including popular models like the Creta, Verna, i20, and its electric SUV Ioniq 5, gives it a competitive edge in both the domestic and export markets.
Hyundai’s manufacturing plant in Chennai serves as a production hub for both the Indian and international markets, including Africa and the Middle East. As of March 2024, the company has sold nearly 12 million vehicles in India, and its plans for capacity expansion by 2026 further bolster its market position.
Hyundai IPO Anchor Investors and Institutional Confidence
Hyundai Motor India raised ₹8,315.28 crore from anchor investors on October 14, 2024. The anchor investor lock-in period lasts for 30 to 90 days, indicating the strategic involvement of long-term investors. This institutional backing adds credibility to the stock’s potential for long-term growth.
Investor Outlook: Should You Buy Hyundai Motor Shares?
While the Hyundai Motor IPO did not generate overwhelming demand, it remains a solid investment for those looking for medium to long-term gains. The company’s strong market position, historical performance, and future growth plans suggest that Hyundai will continue to perform well. The target price of ₹2,472 given by Nomura also reflects positive expectations for the stock.
For retail investors, the minimum investment required was ₹13,720 for a lot size of 7 shares, while high-net-worth individuals (HNI) invested in larger volumes, with bids for up to 511 shares requiring ₹1,001,560.
Conclusion: Hyundai’s IPO – A Long-Term Investment Opportunity
Hyundai Motor India’s IPO may not have sparked initial enthusiasm, but it presents a solid long-term investment opportunity for those with patience. Backed by a global automotive giant, Hyundai’s growth story in India, coupled with its ambitious expansion plans and a reliable financial track record, make it a worthy consideration for medium to long-term investors. The ‘Buy’ rating from Nomura and the target price of ₹2,472 per share further reinforce the company’s growth potential in the competitive Indian auto market.
