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PremiumHyundai Motor IPO Live Updates: Today marked a significant milestone for the country with the launch of the Hyundai Motor India IPO. As a wholly-owned subsidiary of Hyundai Motor Company, Korea, the company has become a prominent automobile manufacturer in India since its establishment in 1996. Hyundai is renowned for its popular models such as the i20, Creta, and Venue.
Hyundai Motor India IPO saw an 18% subscription on the first day, according to BSE data. Retail investors subscribed to 26% of the portion, while non-institutional investors subscribed to 13%. Qualified institutional buyers (QIBs) accounted for 5% of the subscription, and the employee portion received an 80% subscription.
The Hyundai Motor India IPO offers an attractive opportunity for those interested in the automotive sector, given Hyundai's increasing market presence in the country. The bidding for the Hyundai Motor India IPO will commence from October 15, 2024, and will run until October 17, 2024.
The price band for the Hyundai Motor India IPO has been set at ₹1,865 to ₹1,960, with a minimum investment of ₹13,055 for a lot of 7 shares. The projected issue size stands at ₹27,870.16 crore, making it one of the largest IPOs of the year. Hyundai Motor India Ltd secured ₹8,315.28 crore from 225 anchor investors at ₹1,960 per share on Monday, October 14, which includes 21 domestic mutual funds across a total of 83 schemes.
Stay tuned for latest subscription status, GMP, review, more.
The initial public offer of Hyundai Motor India IPO has been subscribed 18% on the first day of subscription today, as per BSE data.
The initial share sale received bid for 1,78,10,310 shares against 9,97,69,810 shares on offer, according to BSE.
The portion for retail investors received 26% subscription while the quota for non-institutional investors got subscribed 13%. The qualified institutional buyers (QIBs) part is booked 5%. The employee portion has been subscribed 80%.
Hyundai Motor India operates three manufacturing facilities in India – located in Irrungattukottai and Sriperumbudur in Tamil Nadu, and one in Talegaon in Pune, Maharashtra. The company took over the Talegaon plant from General Motors India in December 2023, and it is expected to gradually commence operations. The first phase is scheduled to start functioning by H2FY26.
The company anticipates that the combined production capacity of the Chennai and Talegaon plants will increase to 994,000 units once the Talegaon plant is partially operational, and to approximately 1.1 million units once it is fully operational. The objective is to position the Chennai manufacturing plant as a centre for electric vehicle and SUV production to maintain a capacity utilisation of over 90%, with a good balance between domestic sales and exports.
“There is significant value addition as investors move from small cars to SUVs. Also, with capacity expansion planned, it would benefit from increased volumes. We also expect exports to rise substantially. So given all this, we are optimistic about the prospects of Hyundai. However, valuations look aggressive," said Vinit Bolinjkar.
The initial public offer of Hyundai Motor India IPO has been subscribed 17% on the first day of subscription today, at 15:57, as per BSE data.
The portion for retail investors received 25% subscription while the quota for non-institutional investors got subscribed 12%. The qualified institutional buyers (QIBs) part is booked 5%. The employee portion has been subscribed 74%.
The brokerage listed several significant advantages, including: 1) a larger proportion of SUVs than competitors such as Maruti Suzuki India Ltd., 2) powertrain and transmission capabilities, 3) capacity expansion when industry growth is anticipated to pick up steam in FY26, 4) healthy margin and return ratios, and 5) a good mix of higher margin exports.
The foundational principles of the company's business model include robust parentage, cutting-edge technology, the Hyundai brand, and Localization.
The initial public offer of Hyundai Motor India IPO has been subscribed 15% on the first day of subscription today, at 13:48, as per BSE data.
The portion for retail investors received 23% subscription while the quota for non-institutional investors got subscribed 10%. The qualified institutional buyers (QIBs) part is booked 1%. The employee portion has been subscribed 67%.
The company offers a range of 13 models in various passenger vehicle categories, including sedans, hatchbacks, SUVs, and EVs. "Hyundai" has become a reputable and reliable brand in India. The following 8 passenger vehicle models have been honored: i10 (2008), Grand i10 (2014), Elite i20 (2015), Creta (2016), Verna (2018), Venue (2020), i20 (2021), and Exter (2024). Additionally, IONIQ5 received the Green Car of the Year award in 2024.
"The biggest Diwali Celebration this year is to happen in Seoul, South Korea. Hyundai Korea is offloading ₹25k crores worth of shares through OFS in the Indian Markets. From Hyundai’s perspective it’s a no-brainer as their stock in South Korea trades at a measly 5x P/E. Despite contributing only 6.5% of the global revenues and 8% of the profitability, Hyundai’s India unit will be valued at ~42% of the Parent Co.’s MCap on listing.
Given the headwinds that the Global Automobile Industry is facing coupled with signs of slowdown in India, the upcoming IPO might not be a great deal for Indian investors," the brokerage said.
The initial public offer of Hyundai Motor India IPO has been subscribed 13% on the first day of subscription today, at 13:24, as per BSE data.
The portion for retail investors received 20% subscription while the quota for non-institutional investors got subscribed 9%. The qualified institutional buyers (QIBs) part is booked 1%. The employee portion has been subscribed 58%.
The red herring prospectus (RHP) from Hyundai Motor India outlines several risks, including:
- Hyundai Motor India's business and results of operations could be negatively impacted by rises in the prices of parts and materials necessary for their operations.
- The business activities of Kia Corporation and Kia India Private Limited, two of the company's Group Companies, are comparable to those of Hyundai Motor India, potentially leading to conflicts of interest that could negatively affect the business.
- The company has been involved in and may continue to be involved in deals with Hyundai Motor Company and other companies in the Hyundai Motor Group, which could lead to conflicts of interest and potentially harm the business.
“Hyundai Motors is the 2nd largest auto OEM in India and the leading exporter of passenger vehicles. - The company outshines the market with: Their wide product offerings; Stakeholder relationships and operations; Ability to leverage new technologies to enhance operational and manufacturing efficiency; Ability to expand into new businesses such as EVs through innovation. - In the following 4 years, Hyundai Motor India maintained 14-17% share within the domestic market We recommend a ‘SUBSCRIBE’ to the issue for Long Term Investment perspective," the brokerage said.
The initial public offer of Hyundai Motor India IPO has been subscribed 10% on the first day of subscription today, at 12:09, as per BSE data.
The portion for retail investors received 17% subscription while the quota for non-institutional investors got subscribed 7%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 45%.
As of June 30, 2024, the company operated 1,377 sales outlets in 1,036 cities and towns throughout India, along with 1,561 service centers in 957 cities and towns across the country. This marked an increase from the figures reported on March 31, 2022, which stood at 1,282 sales outlets in 974 cities and towns, and 1,422 service centers in 905 cities and towns in India. As of March 31, 2024, their sales and service network ranked as the second largest in India based on the number of customer touchpoints. With the exception of IONIQ 5, all of their passenger vehicles are distributed through their dealer network.
The company's (with a P/E of 26.2) listed peers are Maruti Suzuki India Ltd (with a P/E of 29.7), Tata Motors Ltd (with a P/E of 11.4), and Mahindra & Mahindra Ltd (with a P/E of 31.1 ).
The initial public offer of Hyundai Motor India IPO has been subscribed 8% on the first day of subscription today, at 11:09, as per BSE data.
The portion for retail investors received 12% subscription while the quota for non-institutional investors got subscribed 5%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 30%.
“Hyundai has consistently grown stronger and has been one of the most recognised brands in India since its inception and has been the first- mover in various PV categories. We believe that the outlook for Hyundai continues to be strong owing to its strong parentage and leveraging HMC’s technology and R&D capabilities and strong balance sheet. However, at the upper price band, Hyundai is available at a rich valuation of 26x its FY24 EPS, leaving little on the table for investors. We have a SUBSCRIBE recommendation to this issue for a long term," the brokerage said.
The initial public offer of Hyundai Motor India IPO has been subscribed 4% on the first day of subscription today, at 10:39, as per BSE data.
The portion for retail investors received 7% subscription while the quota for non-institutional investors got subscribed 3%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 13%.
Hyundai Motor India distributed a dividend of over ₹10,000 crore for the fiscal year 2024. It announced a special dividend of ₹13,270 per share, resulting in a total payout of ₹10,782.42 crore during FY24.
Tarun Garg, COO & Whole-time Director of the company, said in an interview with CNBC-TV18 today that we had not paid dividends to the parent during the COVID year. So this was also kind of an accumulated dividend. And just to bring in transparency in the whole process and to make the IPO process smooth, we decided to kind of pay the dividend before the IPO process set in.
According to Garg, market share continues to remain stable for the co. He also added that, royalty rate is expected to be at 3.5% in the near future.
Talking about the product portfolio Tarun Garg, COO & Whole-time Director, said that the company has a big range of SUVs and total sales contribution is approximately 70% in September 2024. Creta is the leader in the mid-SUV segment in India.
The initial public offer of Hyundai Motor India IPO has been subscribed 2% on the first day of subscription today, at 10:12, as per BSE data.
The portion for retail investors received 2% subscription while the quota for non-institutional investors got subscribed 2%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 2%.
Observing the history of India, it is evident that the country is currently in the initial phase of electrification, with a current penetration rate of two and a half percent, supported by government incentives. It is anticipated that electrification will continue to rise. The presence of competition from Chinese, European, US, or other OEMs has always been a factor.
However, the key lies in the company's strategy and its connection with India, as well as its approach to transitioning customers to electric vehicles. Our company firmly believes that our game plan, which includes launching four products, localizing charging infrastructure, and leveraging our strong brand presence in India, positions us well for success, especially with the strong backing of our parent company, HMC.
"At the upper band company is valuing at 26.2x its FY24 earnings along with being valued at 26.7x if we annualize FY25 earnings. Following the issuance of equity shares, the company's market capitalization stands at ₹15,92,581 million, with a market cap-to-sales ratio of 2.28 based on its FY24 earnings.
We believe that the issue is fully priced and recommend “Subscribe –Long Term" rating to the IPO," the brokerage said.
Hyundai Motor India Limited is a division of the Hyundai Motor Group, which is ranked as the third largest original equipment manufacturer (OEM) in the world for passenger vehicle sales in CY2023. Since Fiscal 2009, they have consistently held the position of the second largest auto OEM in the Indian passenger vehicles market based on domestic sales volumes, as per the CRISIL Report. Their track record demonstrates a commitment to producing and selling reliable, feature-rich, innovative four-wheeler passenger vehicles supported by the latest technology.
Hyundai Motor India Ltd garnered ₹8,315.28 crore from 225 anchor investor at Rs. 1,960 per share (the upper end of the price band) including 21 domestic mutual funds through a total of 83 schemes (34.42% of the total allocation to anchor investors).
The Hyundai Motor India IPO has allocated 50% of the shares in the public issue for qualified institutional buyers (QIB), 15% for non-institutional Institutional Investors (NII), and 35% of the offer is set aside for retail investors. The employee reservation segment comprises a maximum of 778,400 equity shares. Eligible employees participating in the employee reservation portion are being offered a discount of ₹186 per equity share.
Hyundai Motor India IPO GMP today is +45. This indicates Hyundai Motor India share price was trading at a premium of ₹45 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 ₹2,005 apiece, which is 2.3% higher than the IPO price of ₹1,960.
According to the latest 19 sessions of grey market activities, the current GMP is at ₹45, 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.
