Hyundai Motor India IPO: Largest in Indian History, Opens October 15 with Price Band of ₹1,865-₹1,960 – Should You Subscribe?

Hyundai Motor India Limited (HMIL) is set to launch India’s largest-ever Initial Public Offering (IPO), valued at ₹27,870 crore, opening for bids on October 15, 2024, and closing on October 17, 2024. The price band for the IPO is fixed between ₹1,865 and ₹1,960 per share, with a face value of ₹10 per share. Investors can bid in lots of 7 shares or multiples thereof, with allotments expected by October 18, 2024, and the company’s shares set to be listed on October 22, 2024, on both the BSE and NSE.

This IPO, entirely an Offer for Sale (OFS) of 42.19 million shares by Hyundai Motor Company, will not generate any direct proceeds for HMIL itself. 50% of the offer is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for Retail Individual Investors (RIIs). Anchor investors can bid on October 14, 2024.

Hyundai Motor India is the second-largest player in India’s passenger vehicle market and third globally. Known for its diverse lineup of models, including sedans, hatchbacks, SUVs, and electric vehicles (EVs), HMIL has sold nearly 12 million vehicles in India and exported to regions like Africa and the Middle East. Its flagship models include the Grand i10 NIOS, Creta, Venue, Alcazar, Tucson, and the electric Ioniq 5.

Analysts have a positive outlook on Hyundai’s long-term prospects. The company is ramping up production capacity, aiming for 1.07 million units annually by 2028, and expanding its EV segment with plans to launch the Creta EV by the end of FY25. Financial experts note that Hyundai’s operating margins are superior to those of competitors like Maruti Suzuki and Tata Motors, and it has a strong presence in both rural and urban markets.

The IPO’s pricing values Hyundai at a PE ratio of 26.3x FY24 EPS, considered attractive compared to Maruti Suzuki, which trades at 30.8x FY24 EPS. Hyundai’s growth potential is further supported by its EBITDA margin of 13.8% in Q1 FY25, which is the best in the industry.

Given its strong market presence, promising EV strategy, and robust financials, experts recommend subscribing to the IPO for long-term gains. The Grey Market Premium (GMP) for the IPO as of October 11, 2024, stands at ₹75, suggesting a possible listing price of ₹2,035 per share.