Hyundai Motor India IPO : Review, Valuation, Opening Date & GMP

Hyundai IPO-Complete Overview

Hyundai IPO a mainboard IPO is a book-built issue of Rs.27,870.16 Cr. (14.22 crore Shares) by Hyundai Motor India Limited (HMIL) that was incorporated in 1996. It is a subsidiary of the Hyundai Motor Group, the world's third-largest auto original equipment manufacturer (OEM) based on passenger car sales in CY2023. According to the CRISIL Report, they have been the second largest automaker in the Indian passenger vehicle industry (in terms of domestic sales volumes) since Fiscal 2009. They have a track record of making and selling reliable and feature-rich four-wheeler passenger vehicles.

Between Fiscal Years 2019 and 2024, India's domestic PV sales volume increased at a 5% CAGR. This growth was despite the revenue reduction (at 10% CAGR) observed over the Fiscal Years 2019 to 2021.

In CY2023, they were among the top three contributors to HMC's global sales volumes, with their share rising from 15.48% in CY2018 to 18.19% in CY2023.

The company relies heavily on exports, which accounted for 23.66% of its total revenue from operations during the nine months ending December 31, 2023. This is the company's largest export contribution in the past three years.

The company is now gearing up for a successful IPO, which might be the largest public issue in the Indian primary market. The forthcoming IPO might surpass the record set by the Life Insurance Corporation (LIC) of India's $2.46 billion offering in May 2022, becoming the largest in the nation's record. 

This new IPO is to be launched on 15 October 2024, and the initial public offering of this upcoming IPO will end on 17 October 2024.

Hyundai IPO Overview

With no new issue component, Hyundai Motor Company's offer for sale (OFS) of 1,42,194,700 equity shares is the entirety of Hyundai IPO. The IPO will be listed at BSE and NSE. The company will not get any Funds from this offering because it is strictly an OFS. The automaker wants to offer retail investors 35%, 50% to institutional investors, and 15% to non-institutional investors of the entire stock on OFS. The Face Value is set at Rs.10 per Equity Share. 

The Hyundai IPO date is from 15 October to October 17, 2024. The IPO listing date is on Tuesday, October 22, 2024. Hyundai Motor India IPO price band is between Rs.1865 to Rs.1960 for each Share.

 

If You want to apply for the IPO, Click Here to Open a Demat Account.

 

Company Financial

The company’s revenue grew by 16% and PAT increased by 29% between FYs ended 31 March 2024 and 31 March 2023.

(Amount in Cr)

 

Detailed Video:

 

Revenue Bifurcation

(Amount in million)

 

Total Sales-wise Breakdown By Volume

 

Domestic Sales Breakdown By Volume

 

Export Sales Breakdown By Volume

 

EVs Sales Breakdown By Volume

 

The Objective of the Issue

The company will not receive any proceeds from this offer as it is purely an OFS. The proceeds shall fall to the promoter holding after necessary expense and tax deductions.

 

Peers of Hyundai Motor India Limited

 

Evaluation

Hyundai Motor India IPO price is between Rs.1865 to Rs.1960 for each Share.

Evaluation of P/E Ratio

Considering the period of FY 2024, with an EPS of Rs.74.58 from the last year, the resulting P/E ratio is 26.28x.

Considering the weighted EPS of Rs.62.56 for the last three years, the P/E ratio is 31.33x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 23.57x.

 

 

In simple words, the P/E ratio of Hyundai Motor IPO (26.28x), compared with the industry’s average P/E of 23.57x, has an overvaluation (on a P/E Ratio basis only). Hence the price of the Share seems aggressively priced for the investors when considered based on the average P/E ratio of the industry. 

 

IPO's Strengths

• According to the CRISIL Report, the company has been the second-largest car OEM in the Indian passenger vehicle industry by domestic sales volumes since Fiscal 2009.

• The company has a diversified portfolio of passenger vehicles spanning powertrains and main passenger vehicle categories.

• Its current passenger car range caters to a varied consumer base, allowing it to provide "something for everyone". Currently, its portfolio includes 13 passenger vehicle models from all main passenger vehicle sectors, organized by body type.

•  It recognizes developing market trends promptly and delivers innovative passenger vehicles and technology to fulfill client demands in India.

• The company’s dealers offer a pan-India sales, distribution, and after-sales support network. As of December 31, 2023, it had 1,366 sales outlets across 1,031 cities and towns in India, as well as 1,550 service centres across 962 cities and towns in India as of March 31, 2021.

• It digitized its customers' and dealers' interactions with one another. Customers can communicate with them at any stage of the passenger vehicle purchasing process and obtain after-sales services via the "myHyundai" app and their website.

•  Flexible and automated manufacturing capabilities.

 

 

 

IPO’s Weaknesses

• Price increases for parts and materials used in the company's operations could hurt its business and results.

• The company relies on a small number of suppliers for parts and materials. Any disruption in the availability of parts and materials could jeopardize its operations.

• The company's activities are dependent on its promoter, HMC. Any adverse change in the company's relationship with HMC and the Hyundai Motor Group's enterprises could harm its business, reputation, financial condition, and operating results.

• The Company, one of its subsidiaries, and its promoter are involved in outstanding legal procedures, and any bad decision in any of these proceedings may negatively harm its business, reputation, and financial Operational conditions and results.

• The company has entered into and may continue to enter into related party transactions with HMC and Hyundai Motor Group companies that may result in conflicts of interest, which could harm its operations.

• Two of its Group Companies, Kia Corporation, and Kia India Private Limited, are in the same line of business as it, which may result in a conflict of interest that could harm its business.

 

Hyundai Motor India IPO GMP Today

Hyundai IPO GMP today is Rs.127 as of 09 October 2024.

 

Hyundai IPO Timetable (Tentative)

The Hyundai Motor IPO open date is from October 15 to October 17, 2024, with IPO allotment on October 18, 2024, refund initiation on October 21, 2024, and listing on Thursday, October 22, 2024.

 

Hyundai IPO Details

The IPO with a face value of Rs.10 per Share is set to start on October 15, 2024, close on October 17, 2024, and offers a total issue size of 1,42,194,700 Shares between Rs.1865 to Rs.1960 per Share with a Lot size of 7 Shares and will be listed at BSE and NSE.

 

Hyundai IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (7 Shares) amounting to Rs.13,720 and 14 Lots (98 Shares) amounting to Rs.1,92,080 respectively, while for HNI investors, the minimum Lot is 15 (105 Shares) amounting to Rs.2,05,800.

 

Hyundai IPO Reservation

 

Promoters and Management of Hyundai IPO

• Hyundai Motor Company

 

Hyundai IPO Lead Managers

• Kotak Mahindra Capital Company Limited.
• Citigroup Global Markets India Private Limited.
• HSBC Securities and Capital Markets (India) Private Limited.
• J.P. Morgan India Private Limited.
• Morgan Stanley India Company Private Limited.

 

Dividend Policy

The company has paid dividends in the following Financial Years as shown in the table below.

Conclusion

Being the second-largest automaker in India, Hyundai's IPO offers investment opportunities with strong domestic and export growth. However, possible risks involved are dependence on suppliers and a possible conflict of interest. Investors need to consider these risk factors before participating in this landmark offering.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

Disclaimer: 

The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.

  

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