Hyundai Motor India IPO ,Expert Opinions

The highly anticipated Hyundai Motor India IPO has generated significant attention as it reaches the final day of subscription.

IPO Overview

• Opening Date: October 15, 2024
• Closing Date: October 17, 2024
• Price Band: ₹1,865 – ₹1,960 per equity share
• Issue Size: ₹27,870.16 crore (comprising an offer for sale of 14.22 crore shares)

Key Details at a Glance

Aspect	Details
Total Subscription	0.86 times (as of Day 3, 12:30 PM)
Retail Portion	0.43 times
NII Portion	0.33 times
QIB Portion	2.03 times
Current GMP	₹17
Expected Listing Price	₹1,977 (approx. 0.87% premium)

Subscription Status

As of Day 3 of the IPO bidding process, Hyundai Motor India’s offering has seen a relatively subdued response from investors. The overall subscription level stands at 0.86 times, with the retail segment being the least subscribed at 0.43 times. However, qualified institutional buyers (QIBs) show strong interest, with their portion subscribed 2.03 times.

Grey Market Insights

The grey market premium (GMP) has seen a significant decline from its peak of ₹570. Today, shares are trading at a premium of ₹17, suggesting a modest debut for the stock on the Indian exchanges.

Expert Analysis: Should You Apply?

Market experts have varied opinions regarding the Hyundai Motor India IPO. Here are the insights from prominent analysts and brokerage firms:

Positive Outlook

• Long-Term Growth Prospects: Analysts at Master Capital Service project a healthy growth trajectory for the domestic passenger vehicle (PV) industry, estimating a compound annual growth rate (CAGR) of 4.5% to 6.5%, contingent on India’s GDP growth.
• Market Leadership: Hyundai is the second-largest automotive original equipment manufacturer (OEM) in India and a leading exporter of passenger vehicles, enhancing its competitive edge.

Caution on Valuation

• High Valuation Concerns: Aditya Birla Capital points out that at the upper price band, Hyundai’s IPO is priced at a rich valuation of 26 times its FY24 earnings per share (EPS), which may leave limited upside for short-term investors.
• Subscription Demand: The tepid demand for the IPO may raise concerns about market sentiment and investor confidence in the offering.

Comparative Valuation

Company	P/E Ratio
Hyundai Motor India	26 times
Maruti Suzuki	27 times
Tata Motors	10 times
Mahindra & Mahindra	36 times

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Marwadi Shares and Finance highlight that despite the high valuation, Hyundai’s position as the second-largest auto OEM in India and its status as a leading exporter provide a solid foundation for investment.

Conclusion: Is It Worth Investing?

For investors contemplating participation in the Hyundai Motor India IPO, several factors must be considered:

• Long-Term Viability: If you’re focused on long-term growth and believe in Hyundai’s potential within the Indian automotive sector, the IPO may be a worthwhile investment.
• Valuation Risks: Short-term investors should be cautious, given the current subscription levels and high valuation relative to earnings.

Next Steps for Investors

• Allotment and Listing Dates: Share allotment is expected to be finalized on October 18, 2024, with shares credited to successful bidders’ demat accounts by October 21. The stock is anticipated to list on BSE and NSE on October 22.

Final Recommendation

Consult with a certified financial advisor to assess how this investment aligns with your portfolio and risk tolerance. The decision to invest in the Hyundai Motor India IPO should be informed by both market conditions and personal financial goals.

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Sources

• Mint
• Master Capital Service
• Aditya Birla Capital
• Marwadi Shares and Finance

This comprehensive analysis of the Hyundai Motor India IPO aims to provide potential investors with the necessary insights to make an informed decision.