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PremiumHyundai IPO Highlights: The Hyundai Motor India IPO closed for subscription on Thursday, October 17, after barely sailing through the three-day window dragged by tepid response from retail investors. India's biggest initial public offering (IPO) was subscribed 2.37 times on the third and last day of issue as qualified institutional buyers (QIBs) saved the show before the curtains closed. Seen as a royal snub by retail investors, the Hyundai Motor India IPO opened for subscription on Tuesday, October 15.
According to BSE data, the Hyundai Motor India IPO received bids for 23.63 crore equity shares as against 9.97 crore shares on offer. Retail investors subscribed to 50% of the portion, while non-institutional investors (NIIs) portion category was booked 60%. The QIB portion saw a subscription of 6.97 times. The employee portion was subscribed 1.74 times.
Hyundai IPO Live: Hyundai IPO allotment date is likely today. The company is expected to fix the basis of share allotment on Friday, October 18. Once the Hyundai Motor India IPO allotment is finalised, the company will credit the equity shares into the demat accounts of eligible investors on October 21 and initiate refunds to unsuccessful bidders on the same day.
Hyundai IPO Live: The bidding for ₹27,870.16 crore worth Hyundai Motor IPO, which began on October 15, ended on October 17. Hyundai IPO allotment is expected to be finalized today, Friday, October 18. The IPO listing date is October 22 and the equity shares of Hyundai Motor India will be listed on both the stock exchanges, BSE and NSE.
Hyundai Motor India IPO grey market premium (GMP) dropped substantially on the third and last day of issue. According to investorgain.com, the GMP for Hyundai Motor IPO shows a discounted price. The cap price for Hyundai Motor IPO is ₹1,960.00. The estimated listing price for Hyundai Motor IPO at the current GMP is ₹1,940.
Domestic brokerage Motilal Oswal Financial Services recommended a ‘Subscribe for long term’ for Hyundai Motor India IPO. At the upper price band of ₹1,960, the issue is priced at 26.3x FY24 P/E and looks reasonably priced compared to Maruti which is trading at 29.8x.
“We expect HMIL to be a key beneficiary of growth in PV segment due to its strong presence in the SUV segment. It is also planning a slew of launches in the EV space," said Motilal Oswal. The company has delivered healthy returns at 33 per cent ROE and 32 per cent ROCE in FY24 and outperformed its peers in the same.
Hyundai Motor India's $3.3-billion initial public offering was oversubscribed by more than two times on Thursday attracting aggressive bidding from institutional investors, even though pricing concerns deterred retail participation.
On the third and last day of bidding, the demand was led by QIBs who bid for 6.97 times the shares earmarked for them. The portion meant for NIIs fetched 60 per cent subscription and the portion reserved for retail investors received 50 per cent subscription. Overall, the issue was subscribed 2.37 times at the end of the bidding window.
This is the first initial share sale by an automaker in over two decades, following Japanese carmaker Maruti Suzuki's listing in 2003. The South-Korean automaker stated that it expects that the listing of the equity shares will enhance its visibility and brand image, and provide liquidity and a public market for the shares.
The initial public offer of Hyundai Motor India IPO has been subscribed 2.37 times on the third day of subscription today, at 17:21 IST, as per BSE data.
The initial share sale received bid for 23,63,29,191 shares against 9,97,69,810 shares on offer, according to BSE.
The portion for retail investors received 50% subscription while the quota for non-institutional investors got subscribed 60%. The qualified institutional buyers (QIBs) part is booked 6.97 times. The employee portion has been subscribed 1.74 times.
“Hyundai Motor India has planned for an offer for sale under which the promoter is offloading its 17.5% stake in the company. Hyundai Motor India has strong parentage, relevant product profile, robust market positioning and healthy financial profile. At upper price band the IPO is coming with an underlying P/E valuation of 26.3x on its FY24 earnings compared to Maruti Suzuki India's P/E valuation at 30.4x its FY24 earnings," the brokerage said.
"The company is planning to expand its EV portfolio by launching 4 new models including Creta EV by Q4FY25. Post issue the promoter shareholding will come down to 82.5%, indicating further dilution in future. The IPO is reasonably priced with a post-issue PER of 26.3x, in line with its peers, and a return on equity of 56.82% (FY24). We recommend a “SUBSCRIBE" rating for Hyundai Motors India IPO," the brokerage said.
The initial public offer of Hyundai Motor India IPO has been subscribed 2.30 times on the third day of subscription today, at 15:12 IST, as per BSE data.
The initial share sale received bid for 22,94,07,857 shares against 9,97,69,810 shares on offer, according to BSE.
The portion for retail investors received 47% subscription while the quota for non-institutional investors got subscribed 54%. The qualified institutional buyers (QIBs) part is booked 6.83 times. The employee portion has been subscribed 1.67 times.
“At the upper price band of ₹1960, the issue is priced at 26.3x FY24 P/E and looks reasonably priced compared to Maruti which is trading at 29.8x. We expect Hyundai Motor India to be a key beneficiary of growth in PV segment due to its strong presence in the SUV segment. It is also planning a slew of launches in the EV space," the brokerage said.
“For the last three fiscals, the company has reported an average EPS of Rs. 62.56, and an average RoNW of 39.11%. The issue is priced at a P/BV of 13.11 based on its NAV of Rs. 149.52 as of June 30, 2024, as well as post-IPO equity capital since this is a secondary issue. If we attribute FY25 annualised super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 26.73, and based on FY24 earnings, the P/E stands at 26.28. The issue relatively appears fully priced, but the company is poised for bright prospects post completion of its ongoing expansions," the brokerage said.
The initial public offer of Hyundai Motor India IPO has been subscribed 2.09 times on the third day of subscription today, at 14:00 IST, as per BSE data.
The initial share sale received bid for 20,87,08,248 shares against 9,97,69,810 shares on offer, according to BSE.
The portion for retail investors received 45% subscription while the quota for non-institutional investors got subscribed 43%. The qualified institutional buyers (QIBs) part is booked 6.23 times. The employee portion has been subscribed 1.61 times.
As at March 31, 2024, the corporation functions as a fully-owned subsidiary of HMC, which offers a wide range of more than 40 vehicle models, encompassing both passenger cars and commercial EVs distributed internationally. The Royalty Agreement with HMC gives the Company an exclusive right to produce and market PVs in India, with a requirement for a quarterly royalty payment amounting to 3.5% of sales revenue.
HMC offers essential assistance, including the provision of machinery and technical knowledge, with the condition that prior authorization is necessary for any vehicle exports. HMC retains the right to terminate the agreement for reasons like the non-payment of royalty fees.
The initial public offer of Hyundai Motor India IPO has been subscribed 1.23 times on the third day of subscription today, at 13:12 IST, as per BSE data.
The initial share sale received bid for 12,26,02,627 shares against 9,97,69,810 shares on offer, according to BSE.
The portion for retail investors received 44% subscription while the quota for non-institutional investors got subscribed 38%. The qualified institutional buyers (QIBs) part is booked 3.24 times. The employee portion has been subscribed 1.56 times.
Hyundai is aiming to align its EV strategy and schedule with the demands of the Indian market by introducing suitable EV models in every price category. The company has adopted a phased approach, starting with the introduction of luxury EVs and intending to transition to the mass market as the EV infrastructure expands in India.
As part of this plan, four EV models are scheduled for release, with the Creta EV expected to launch in the final quarter of FY25. Hyundai Motor Company's diverse xEV lineup, which includes battery EVs, hybrid EVs, plug-in hybrid EVs, mild hybrid EVs, and fuel cell EVs, will be crucial in implementing its EV strategies.
The initial public offer of Hyundai Motor India IPO has been subscribed 86% on the third day of subscription today, at 12:27 IST, as per BSE data.
The initial share sale received bid for 8,57,00,048 shares against 9,97,69,810 shares on offer, according to BSE.
The portion for retail investors received 43% subscription while the quota for non-institutional investors got subscribed 33%. The qualified institutional buyers (QIBs) part is booked 1.99 times. The employee portion has been subscribed 1.52 times.
Hyundai's strategy involves focusing on the premiumization of its offerings, with an emphasis on selling passenger vehicles at higher average selling prices. In India, there is a rising proportion of younger car buyers who are increasingly considering factors other than price, such as design, driving experience, safety, advanced features, and aesthetics. Consequently, there has been a shift both between vehicle segments towards SUVs and within segments towards higher-end variants. The average selling price of passenger vehicles in India has shown a compound annual growth rate of 7% to 9% between FY19 and FY24, reflecting this trend.
"Despite the company's growth potential and strong market presence, the issue comes with higher valuations. The P/E ratio of 26.28x is above the industry average of 24.41x and far higher than its parent company Hyundai Motor Global’s P/E of 5x.
However, HMI boasts industry-leading return ratios, with a RoE of 56.82% and RoCE of 62.9%, significantly surpassing the listed peer averages of 23.25% and 21.85%, respectively. We recommend SUBSCRIBE to this issue for long-term gains," the brokerage said.
"The IPO is fully priced, it could limit the potential upside for investors. As the IPO is an Offer for Sale (OFS), the company itself does not receive any proceeds. Given the significant size of the IPO, it may be difficult to achieve substantial listing gains.
Investors with a long-term perspective and a willingness to accept potential listing challenges may consider applying for the Hyundai Motor India IPO," the brokerage said.
Hyundai Motor Company's promoter will offer 14.2 crore equity shares in the offer-for-sale as per the RHP. The IPO does not include any fresh issue component.
The merchant bankers in charge of the Hyundai Motor India IPO are Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), JP Morgan India, and Morgan Stanley India Company, while KFin Technologies will serve as the registrar.
The initial public offer of Hyundai Motor India IPO has been subscribed 43% on the third day of subscription today, at 10:12 IST, as per BSE data.
The initial share sale received bid for 4,26,35,516 shares against 9,97,69,810 shares on offer, according to BSE.
The portion for retail investors received 40% subscription while the quota for non-institutional investors got subscribed 27%. The qualified institutional buyers (QIBs) part is booked 58%. The employee portion has been subscribed 1.38 times.
Unsoo Kim oversees the overall operations and business of the company as the Managing Director. Tarun Garg serves as the Whole-time Director and Chief Operating Officer, responsible for driving sales, service, dealer management, product strategies, marketing, profitability, customer relationship, brand, and media management.
Gopalakrishnan Chathapuram Sivaramakrishnan leads the overall manufacturing process, strategic planning, resource utilization, and procurement practices as the Whole-time Director and Chief Manufacturing Officer. Wangdo Hur holds the position of Whole-time Director and Chief Financial Officer, and also serves as the business head for finance at the company.
“Hyundai has ensured to maintain stable share market in India historically. It enjoys loyalty among the Indian consumer base owing to smooth and affordable after sales service. Equipped with R&D from Korea and an automated factory in Chennai, company has been able to optimise its operations while expanding it’s distribution. Hyundai also plans to gradually become a major player in the EV segment. Company has also recorded one of the highest RoNW among its peers. We believe the company can take advantage of the growing PV market in India with its diverse offerings," the brokerage said.
Hyundai Motor India IPO GMP today is +17. This indicates Hyundai Motor India share price was trading at a premium of ₹17 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Hyundai Motor India share price is indicated at ₹1,977 apiece, which is 0.87% higher than the IPO price of ₹1,960.
According to the latest 21 sessions of grey market activities, the current GMP is at ₹17, indicating a downward trend. The lowest GMP recorded is ₹0, and the highest GMP is ₹570, as per the analysis by experts at investorgain.com.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
