Hyundai Motor India has officially launched its highly anticipated Initial Public Offering (IPO) today, opening the door for investors to participate in one of India’s largest automotive players. The IPO subscription will remain open until 17th October 2024, with a price band set between ₹1865 and ₹1960 per equity share. The public offering is entirely an Offer for Sale (OFS), meaning that the proceeds will not be added to the company’s balance sheet. Hyundai Motor India aims to raise ₹27,870.16 crore through this IPO. Meanwhile, in the grey market, shares are trading at a premium of ₹65. Should you invest? Here’s everything you need to know.
Hyundai Motor India IPO Subscription Status
On day one of the IPO, the book build issue had already attracted attention, albeit modestly. By 12:45 PM, the issue had been subscribed 0.11 times, with the retail portion subscribed 0.19 times and the Non-Institutional Investor (NII) portion at 0.08 times. Below are the key details investors should be aware of:
1. Hyundai Motor India IPO Grey Market Premium (GMP): According to stock market analysts, shares of the company are currently available at a ₹65 premium in the grey market, reflecting moderate demand.
2. Hyundai Motor India IPO Price: The company has set a price band between ₹1865 and ₹1960 per equity share for the public issue.
3. Hyundai Motor India IPO Dates: The IPO opened on 15th October 2024 and will remain open until Thursday, 17th October 2024, allowing investors to bid for shares between 10:00 AM and the market close.
4. Hyundai Motor India IPO Size: The auto giant is looking to raise ₹27,870.16 crore through this Offer for Sale.
5. Hyundai Motor India IPO Lot Size: Investors can apply for the IPO in lots, with one lot comprising seven shares.
6. IPO Allotment Date: The tentative allotment date for shares is set for 18th October 2024.
7. IPO Registrar: KFin Technologies has been appointed as the official registrar for this IPO.
8. IPO Lead Managers: The public issue is being managed by top financial institutions, including 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.
9. Listing Date: The IPO is expected to be listed on both the BSE and NSE on 22nd October 2024, adhering to the ‘T+3’ rule for listing.
Should You Apply for the Hyundai Motor India IPO?
Many investment analysts have weighed in on the Hyundai Motor India IPO. Gaurav Garg, a Research Analyst at Lemonn Markets, has assigned a ‘subscribe’ rating, stating, “Hyundai Motor India’s upcoming IPO is set to be the largest in the country’s history, offering investors a unique opportunity to engage with the second-largest car manufacturer in India. The brand has showcased remarkable operational efficiency, sourcing about 90% of its parts locally. This has significantly contributed to its robust financial performance, highlighted by a revenue CAGR of 19.4% over FY21-24 and an impressive return on capital employed (RoCE) exceeding 50% in FY24. With strong financials and a diverse product lineup, Hyundai presents an attractive long-term investment opportunity, even if initial listing gains may be modest.”
Master Capital has echoed similar sentiments, assigning a ‘buy’ tag to the issue. Their review pointed out, “The company plans on maintaining its strong position by expanding its passenger vehicle portfolio by leveraging its deep understanding of consumer preferences and increasing its EV market share. The company also intends to continue the premiumization of its passenger vehicle portfolio and focus on calibrated manufacturing capacity expansion and efficient capital allocation. The issue is fully priced, and Investors interested in the company can invest in the IPO for the long term.”
Shivani Nyati, Head of Wealth at Swastika Investment, also offered a cautiously optimistic view, stating, “The IPO is fully priced; it could limit the potential upside for investors. The IPO is an Offer for Sale (OFS), so the company receives no proceeds. Given the significant size of the IPO, it may not be easy to achieve substantial listing gains. Investors with a long-term perspective and a willingness to accept potential listing challenges may consider applying for the HMIL IPO.”
Final Verdict: Is It Worth Investing?
Although the IPO is fully priced and will not bring any additional capital to the company’s balance sheet, Hyundai Motor India’s solid financial performance and market position offer long-term growth potential. For those with a long-term investment horizon, the Hyundai Motor India IPO presents a strong opportunity. However, investors hoping for immediate listing gains may need to manage their expectations.
