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Hyundai Motor India Ltd (HMIL) IPO: Key Details and Analyst Recommendations
Hyundai IPO Launch Date in India: Hyundai Motor India’s Rs 27,870-crore initial public offering (IPO) received a moderate response on the first day, with 18 percent of the total offer being subscribed.
As of October 15, retail investors booked 26 percent of their shares, bidding for 1.3 crore shares out of the 4.94 crore available.
Non-institutional investors placed bids for 27.66 lakh shares, which is 13 percent of the 2.12 crore shares available for them.
Employees subscribed to 80 percent of their portion, bidding for 6.19 lakh shares out of 7.78 lakh offered. Meanwhile, qualified institutional buyers (QIBs) subscribed to only 5 percent of their allocated shares.
Hyundai Motor India, the Indian subsidiary of South Korean automaker Hyundai, launched its much-anticipated IPO for public subscription starting today.
The Rs 27,870.2 crore IPO is a complete offer-for-sale (OFS) where Hyundai’s South Korean parent company will divest a portion of its stake. The offer will close on October 17.
IPO Timeline and Details
- Public Subscription Period: October 15 – October 17
- Anchor Investor Bids: October 14
- Share Allotment: October 18
- Listing on BSE and NSE: October 22
- This IPO is India’s largest, surpassing the previous record set by LIC’s Rs 21,000-crore IPO.
Price Band and Lot Size
The price band for the IPO is set between Rs 1,865 and Rs 1,960 per share. Investors can bid for a minimum of 7 equity shares, with additional bids to be made in multiples of 7 shares.
Hyundai IPO GMP
As per market observers, Hyundai Motor India’s unlisted shares are trading at a Rs 45 premium in the grey market. It’s important to note that the GMP fluctuates based on market sentiment.
Analyst Recommendations
The Hyundai Motor India IPO is a landmark event for the Indian auto industry, being the first automaker’s IPO in over two decades, following Maruti Suzuki’s listing in 2003. Most brokerages have recommended a ‘buy,’ reflecting optimism around this offering.
Giving a ‘Buy’ recommendation, Bajaj Broking in its IPO note said, “For the last three fiscals, the company has reported an average EPS (earning per share) of Rs 62.56, and an average RoNW (return on net worth) of 39.11 per cent. The issue is priced at a P/BV (price-to-book value) of 13.11 based on its NAV (net asset value) of Rs 149.52 as of June 30, 2024, as well as post-IPO equity capital since this is a secondary issue.”
Another brokerage Master Capital Services in its IPO note said, “Hyundai’s IPO offers potential value growth by expanding investment prospects in the underdeveloped Indian auto market.”
Another brokerage LKP Securities also recommended a ‘subscribe for long term’.
However, since the PV industry is slightly in a slow lane currently, this may augur well for the company, as HMI is expanding its capacity by 30 per cent in the next 2 to 3 years. With new model launches (4 in mid-term, including the new Creta EV), HMI should give a strong fight to its rivals. At the upper end of the price band, on FY 24 earnings, the stock should trade at 26x times which is a fair value as compared to its closest peer Maruti Suzuki (29x FY 24 earnings).
“Therefore, on all favourable parameters, we assign a SUBSCRIBE rating on the stock. We recommend investing in this stock over the long term for higher returns,” LKP said.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Readers are advised to check with certified experts before making any investment decisions.
