Introduction
Hyundai Motor India Ltd. is all set to make a remarkable debut in the Indian stock market with its highly anticipated initial public offering (IPO), scheduled to accept subscriptions starting from October 15, 2024. This significant event marks a milestone not only for Hyundai but also for the Indian automotive industry. With the potential to become the largest IPO in India, surpassing the ₹21,000 crore offering by Life Insurance Corporation (LIC) in May 2022, Hyundai Motor India is poised to capture the attention of investors and analysts alike. As we delve deeper into the details surrounding this IPO, we will explore the company’s background, investment considerations, key dates, pricing, and more.
Company Overview: Hyundai Motor India
Founded in 1996, Hyundai Motor India has grown to become the second-largest automaker in the country, following Maruti Suzuki India in terms of sales. It forms part of the Hyundai Motor Group, which ranks as the third-largest automotive original equipment manufacturer (OEM) globally, with a staggering 7.3 million passenger vehicle sales reported in 2023.
The company primarily manufactures a versatile range of passenger vehicles, catering to various market segments, including sedans, hatchbacks, SUVs, and battery-electric vehicles. At present, Hyundai Motor India offers a comprehensive lineup of 13 distinct passenger car models.
Hyundai has firmly established its presence in India with a robust network comprising 1,366 sales outlets and 1,550 service centers nationwide. Despite competition from global players like Ford and General Motors, Hyundai has successfully navigated the Indian market for over two decades, solidifying its status as a leader in the automotive sector.
Global Presence and Achievements
Hyundai Motor India has achieved significant milestones in terms of exports, with close to 12 million passenger cars exported from its Indian operations by March 2024. In CRISIL research, Hyundai’s Indian division has consistently ranked as the second-largest auto OEM in the Indian passenger car market for several fiscal years.
Key Details of Hyundai Motor India IPO
Important Dates
| Event | Date |
|---|---|
| IPO Subscription Period | October 15 – October 17, 2024 |
| Anchor Investor Bidding | October 14, 2024 |
| Allotment Date | October 18, 2024 |
| Refunds Processed | October 21, 2024 |
| Listing Date | October 22, 2024 |
IPO Price Band
The price band for Hyundai Motor India’s IPO has been set between ₹1,865 and ₹1,960 per equity share with a face value of ₹10. The price limits are designed to ensure that the upper price does not exceed 120% of the lower price while maintaining a minimum threshold of 105%.
Lot Size and Investment Minimum
Investors can apply for a minimum of seven shares in the IPO, with potential investments starting at a minimum of ₹13,720 based on the upper price of ₹1,960 per share.
Objectives of the IPO
Hyundai Motor India is seeking to raise over ₹27,870.16 crore (about $3.3 billion) through this IPO, with the offering primarily consisting of an offer for sale (OFS) up to 14.22 crore shares, accounting for approximately 17.5% of the company’s overall equity. Notably, Hyundai will not issue new shares as part of this IPO.
Investor Considerations
Hyundai Motor India IPO Reservation Structure
The allocation of shares in the Hyundai Motor India IPO is structured as follows:
| Investor Type | Allocation Percentage |
|---|---|
| Qualified Institutional Buyers (QIBs) | 50% |
| Non-Institutional Investors | 15% |
| Retail Investors | 35% |
| Employee Reservation | Approx. 7,78,400 shares |
Key Risks to Consider
As with any investment, potential investors should consider the inherent risks associated with Hyundai Motor India’s operations. One significant risk is the reliance on a limited number of suppliers for parts and materials. Any fluctuations in prices or disruptions in supply could adversely affect the company’s financial performance. Furthermore, Hyundai’s operations are closely tied to the parent company, Hyundai Motor, which adds another layer of operational risk.
Listed Peers and Market Comparisons
The following table outlines Hyundai Motor India’s listed peers along with their respective price-to-earnings (P/E) ratios as of October 4, 2024:
| Company | P/E Ratio |
|---|---|
| Mahindra & Mahindra (M&M) | 29.96 |
| Tata Motors Ltd | 11.36 |
| Maruti Suzuki India | 17.93 |
Current Grey Market Premium (GMP)
As of now, the grey market premium for Hyundai Motor India shares stands at ₹60, reflecting a positive sentiment among investors. This suggests that ongoing demand in the grey market indicates a potential listing price that could surpass the upper end of the IPO price band, estimating an expected listing around ₹2,020 per share, which is approximately 3.06% higher than the maximum IPO price of ₹1,960.
However, it is noteworthy that the GMP has shown some volatility, ranging from a low of ₹0 to a high of ₹570 in recent sessions. Market sentiments are crucial in influencing the final listing price and should be monitored closely.
FAQs about Hyundai Motor India IPO
1. What is the IPO subscription period for Hyundai Motor India?
The subscription period for the Hyundai Motor India IPO is from October 15 to October 17, 2024.
2. How much is Hyundai Motor India looking to raise through the IPO?
Hyundai Motor India aims to raise over ₹27,870.16 crore (approximately $3.3 billion) through this IPO.
3. What is the minimum lot size for the Hyundai Motor India IPO?
Investors can bid for a minimum of 7 shares in the Hyundai Motor India IPO.
4. What are the key risks associated with investing in Hyundai Motor India?
Key risks include dependence on a limited number of suppliers for parts and materials, which can affect operations and financial performance.
5. Who are the lead managers for the Hyundai Motor India IPO?
The lead managers for the IPO include Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities, JP Morgan India, and Morgan Stanley India. The key issue registrar is Kfin Technologies Limited.
Conclusion
Hyundai Motor India’s IPO presents a significant opportunity for investors looking to tap into the Indian automotive market. As the company makes its debut on the stock exchange, market participants will be closely monitoring various factors influencing the IPO’s performance, from the overall demand in the grey market to the company’s future growth prospects. With its strong market presence and ambitious growth strategies, Hyundai Motor India is not only ready to captivate investors but also to set benchmarks in the automotive industry in India. Consider these insights as you evaluate your investment options in this landmark IPO.