Hyundai Motor India IPO: Check latest GMP, analyst views, issue details ahead of opening on October 15

Hyundai Motor India IPO is scheduled to open on Tuesday, October 15, and close on Thursday, October 17. The details on allocation to anchor investors for Hyundai Motor IPO will be out on Monday, October 14. Hyundai Motor India IPO price band has been fixed in the range of ₹1,865 to ₹1,960 per equity share of face value of ₹10.

Established in May 1996, Hyundai Motor India Limited operates as a division of the Hyundai Motor Group, which ranks as the third largest auto original equipment manufacturer (OEM) globally in terms of passenger vehicle sales. The organisation produces and markets technologically advanced, dependable, and feature-packed four-wheeler passenger vehicles, as well as components like engines and transmissions. Located near Chennai, the company’s manufacturing facility has the capacity to manufacture its entire range of vehicle models.

The company produces and markets passenger vehicles with four wheels, which encompass sedan, hatchback, SUV, and electric vehicle (EV) models.

Among the company’s offerings are the Grand i10 NIOS, i20, i20 N Line, AURA, Elantra, Venue, Venue N Line, Verna, Creta, Creta N Line, Alcazar, Tucson, and the all-electric SUV Ioniq 5.

The company ships its products to Africa, the Middle East, Bangladesh, Nepal, Bhutan, and Sri Lanka. As of March 31, 2024, the company has vended nearly 12 million passenger vehicles in India and via exports.

Let’s check what does Hyundai Motor India IPO GMP today signal ahead of opening for subscription;

Hyundai Motor India IPO GMP today is +165. This indicates Hyundai Motor India share price was trading at a premium of ₹165 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 ₹2,125 apiece, which is 8.42% higher than the IPO price of ₹1,960.

According to the latest 15 sessions of grey market activities, the current GMP is at ₹165, 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.

Hyundai Motor India IPO details

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.

Valuations and Views

Aequitas Investments

Aequitas Investments’ new analysis indicates that while the planned Initial Public Offering (IPO) of Hyundai Motors India has generated a lot of interest in the Indian markets, it may not be as promising for Indian investors as first thought.

The research raised a number of issues, including the valuation mismatch and larger sector difficulties as causes for worry.

“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,” said Aequitas Investments in its report.

According to the report, Hyundai sees it as a no-brainer since their stock in South Korea is trading at a low 5x P/E ratio. The brokerage also emphasized key points, noting that despite contributing only 6.5% of global revenues and 8% of profitability, Hyundai’s India unit will be valued at approximately 42% of the Parent Co.’s Market Capitalization upon listing.

Additionally, Hyundai Global holds a controlling stake of about 34% in Kia Motors (Hyundai India does not have a stake in Kia India) and completely owns Genesis Motors, a luxury vehicle brand in South Korea. Hyundai Kia is the third largest group, having sold 7.3 million vehicles in 2023.

Nuvama Institutional Equities

“The parent is likely to offload a 17.5% stake. Hyundai Motors India’s 9MFY24 PAT was ₹44 billiom. If we annualise the earnings and assume a 5% PAT CAGR over FY24–27E, its PAT increases to ₹68 billion. At the top end of IPO valuation of ₹1,593 billion, FY27E P/E works out to 24x. Earnings growth is assumed in single digits, to factor in increase in Royalty and reduction in Other income due to a large dividend payout of ₹108 billion in Jan-24,” the brokerage said.

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.