Hyundai Motor India Limited (HMIL), a wholly owned subsidiary of Hyundai Motor Company (HMC), embodies the global brand vision of "Progress for Humanity." With a commitment to sustainable and green manufacturing operations, HMIL offers innovative mobility solutions driven by cutting-edge technology. This IPO presents a unique opportunity for investors, so let's delve into the essential details surrounding it.

Hyundai Motor India IPO Details

The Hyundai Motor India IPO, classified as a Book Built Issue, is seeking to raise ₹27,870.16 Crores through an Offer for Sale of 1,421.94 Lakh Shares. The subscription period is open from October 15, 2024, to October 17, 2024. The allotment date is projected for October 18, 2024, with the tentative listing on the BSE and NSE expected around October 22, 2024.

Price Band: The shares are offered at a price band of ₹1,865 to ₹1,960 per equity share, with a minimum lot size of 7 shares.

Investment Requirements: Retail investors need to invest at least ₹13,720, while High-Net-Worth Individuals (HNIs) must invest in 15 lots (105 shares), totaling ₹2,05,800.

The IPO is managed by prominent book-running lead managers, including Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, and Morgan Stanley India Company Private Limited. The registrar for the issue is KFin Technologies Limited.

Hyundai Motor India IPO Grey Market Premium

As of today, the Grey Market Premium (GMP) for Hyundai Motor India is reported to be ₹0. It's important to note that the GMP is subject to demand and supply dynamics in the unregulated market and should be taken only as a reference.

Live Subscription Status

As of 5:00 PM on October 16, 2024, the live subscription status for the Hyundai Motor India IPO indicates a subscription rate of 0.42 times. Investors can keep track of real-time updates on the BSE website for precise information.

Anchor Investors

Hyundai Motor India has successfully raised ₹8,315.27 Crores from anchor investors at a price of ₹1,960 per share, allocating 42,424,890 equity shares. The list of anchor investors can be checked for more details.

Allotment Process

The allotment of shares for the Hyundai Motor India IPO is expected to be finalized on October 18, 2024. Investors can check their allotment status by visiting the registrar's website and entering the required details such as application number or PAN.

Objectives of the IPO

It's crucial to highlight that Hyundai Motor India will not benefit from the proceeds of this IPO, as the funds will go entirely to the Promoter Selling Shareholder after covering offer-related expenses and taxes.

Financial Performance Review

Hyundai Motor India has shown consistent financial growth over the years:

Revenue for Fiscal Year 2024 stands at ₹7,13,023.25 Million, up from ₹6,14,366.42 Million in 2023 and ₹4,79,660.48 Million in 2022.

EBITDA for FY 2024 is reported at ₹91,326.16 Million, reflecting growth from ₹75,487.80 Million in FY 2023.

The Profit After Tax (PAT) also showcases an upward trend, increasing from ₹29,015.91 Million in FY 2022 to ₹60,600.44 Million in FY 2024.

For this IPO, Hyundai Motor India presents a pre-issue EPS of ₹74.58, with a corresponding P/E ratio of 26.28x, suggesting that the IPO is fairly valued against its financial performance.

Concerns and Considerations

Despite its strong financials, potential investors should consider several risks:

Royalty Payment Risks: Future increases in royalty charges by the parent company could adversely affect profitability.

High Promoter Holding: Promoters will retain 82.5% of ownership post-listing, with a 7.5% stake sale still pending, potentially creating supply pressure in the market.

Competitive Landscape: Competition from KIA Motors, a sister brand, may limit Hyundai's market share growth.

Valuation Concerns: With a market share of only 6% of total industry sales, Hyundai's high market capitalization demands are questionable.

P/E Valuation Discrepancies: Hyundai’s desired P/E ratio of 27x is significantly higher than Tata Motors' 11x and Mahindra's 35x, raising concerns about its valuation compared to competitors.

Conclusion: Investment Outlook

Considering the robust financial performance yet weighing the associated risks and competitive challenges, the Grey Market Premium (GMP) indicating potential listing gains of 0% raises caution. Therefore, it is advisable for investors to avoid the Hyundai Motor India Limited IPO for both short-term gains and long-term investment strategies.

The current active IPO is Lakshya Powertech Limited IPO, Hyundai Motor India Limited.

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