The initial public offering (IPO) of Hyundai Motor India Limited (HMIL) hit the Indian primary market on October 15, 2024. This highly awaited offering has caught the attention of investors across India, with the public issue slated to raise a whopping ₹27,870.16 crore.
This IPO has been generating buzz, not just because of Hyundai’s strong market presence in India but also due to its pricing, grey market premium (GMP), and subscription numbers.
Let’s break down the key details investors need to know before applying.
Key Details of Hyundai Motor India IPO
| Details | Information |
|---|---|
| IPO Price Band | ₹1865 – ₹1960 per share |
| IPO Dates | October 15, 2024 – October 17, 2024 |
| Issue Type | Book Built Issue |
| IPO Size | ₹27,870.16 crore |
| Lot Size | 7 shares per lot |
| IPO Allotment Date | October 18, 2024 |
| Listing Date | October 22, 2024 (expected) |
| Registrar | KFin Technologies |
| Lead Managers | Kotak Mahindra, Citigroup Global, J.P. Morgan |
| Stock Exchanges | BSE, NSE |
Subscription Status on Day 1
As of Day 1 (October 15, 2024), the Hyundai Motor India IPO received a moderate response, reflecting a cautious approach by retail and institutional investors alike. Here’s the subscription breakdown:
- Total Subscription: 0.01 times
- Retail Investor Subscription: 0.02 times
- Non-Institutional Investor (NII) Subscription: 0.02 times
While early subscription numbers appear low, market analysts expect a surge in bidding activity as the IPO progresses towards its closing date.
Grey Market Premium (GMP) and Market Sentiment
In the grey market, Hyundai Motor India shares are trading at a premium of ₹65. Though the GMP is modest, it indicates that there’s still considerable interest among investors who are betting on the stock’s performance post-listing.
A lower-than-expected GMP can be attributed to the IPO’s fully-priced nature, but analysts remain optimistic about Hyundai’s long-term prospects.
The company’s established brand reputation, strong market share, and robust financials are likely to fuel post-listing gains, even if short-term returns appear muted.
Should You Apply?
Several analysts and brokerage firms have weighed in on whether Hyundai’s IPO is a good investment. Here’s a summary of their opinions:
Lemonn Markets (Gaurav Garg): Subscribe for Long-Term
“Hyundai Motor India’s IPO is a rare opportunity to invest in the second-largest car manufacturer in India. The company has showcased impressive operational efficiency with 90% local sourcing, driving its revenue CAGR of 19.4% over FY21-24. With an RoCE exceeding 50%, Hyundai is well-positioned for long-term growth, despite limited short-term listing gains.”
Swastika Investment (Shivani Nyati): Cautiously Optimistic
“The IPO is fully priced, leaving little room for major listing gains. However, for long-term investors, Hyundai remains an attractive option. It has a strong EV roadmap, a well-diversified product portfolio, and excellent financial performance.”
Master Capital: Strong Buy
“The company’s focus on premiumizing its passenger vehicle portfolio, expanding into electric vehicles, and optimizing its manufacturing capacity makes Hyundai a solid investment for those with a long-term horizon.”
Hyundai Motor India: The Long-Term Investment Perspective
Hyundai Motor India is already a dominant player in the Indian automobile market, with a comprehensive product lineup that caters to diverse consumer needs. The company’s plan to expand its electric vehicle (EV) offerings and maintain its leadership in passenger vehicles presents an attractive investment thesis.
Key Strengths of Hyundai Motor India:
- Strong Financials: Hyundai boasts a 19.4% CAGR in revenue between FY21 and FY24.
- Local Sourcing: Approximately 90% of Hyundai’s parts are sourced locally, enhancing cost-efficiency.
- EV Market Expansion: The company is aggressively targeting a larger share of India’s growing EV market.
Risk Factors to Consider
While Hyundai Motor India offers a robust investment opportunity, there are some risks investors should be aware of:
- Fully Priced IPO: The price band of ₹1865-₹1960 per share is on the higher end, limiting the potential for immediate listing gains.
- Offer for Sale (OFS): Since this IPO is fully an Offer for Sale, none of the proceeds will flow into the company’s balance sheet, which could limit short-term growth prospects.
Conclusion: Apply or Wait?
The Hyundai Motor India IPO is an attractive option for long-term investors who believe in the company’s operational strength and market leadership. While the immediate listing gains may not be substantial, the company’s long-term prospects, backed by its expansion into the EV market, make it a strong buy for those willing to hold.
However, if you’re looking for quick returns, the fully priced nature of this IPO may not provide the desired short-term gains. Carefully consider your investment horizon before applying.
Disclaimer
This article is for informational purposes only and should not be considered financial advice. Always consult a financial expert before making any investment decisions.
