The Hyundai Motor India IPO is one of the most anticipated public offerings in the Indian stock market, opening for subscription on October 15, 2024, and closing on October 17, 2024. This IPO is set to make history as it aims to be the largest public issue in India, surpassing the Life Insurance Corporation's (LIC) IPO worth ₹21,000 crore that opened for bidding in May 2022. With this launch, Hyundai Motor India will also secure its position as one of Asia’s biggest IPOs in recent times.

Company Overview

Hyundai Motor India Ltd, a subsidiary of Hyundai Motor Company from South Korea, has been a formidable player in the Indian automotive market since its inception in 1996. The company is not only the second-largest carmaker by sales in India but also boasts a diverse portfolio of 13 passenger vehicle models, including sedans, hatchbacks, SUVs, and battery electric vehicles (EVs).

In 2023, Hyundai Motor Group, which includes both Hyundai and Kia, emerged as the third-largest auto original equipment manufacturer (OEM) globally based on passenger vehicle sales, having sold an impressive 7.3 million vehicles. Hyundai Motor India has operated a vast network of 1,366 sales points and 1,550 service points across the country, reflecting its deep-rooted presence in the Indian automotive landscape.

IPO Details

The IPO is expected to raise approximately $3.3 billion, which translates to over ₹27,870.16 crore. Notably, this offering is an offer for sale (OFS), where Hyundai's South Korean parent will sell up to 142,194,700 shares (14.22 crore shares), amounting to 17.5% of its stake in the Indian subsidiary. Post-IPO, Hyundai Motor Company will retain 82.5% of its stake in Hyundai Motor India.

The price band for the IPO has been fixed at ₹1,865 to ₹1,960 per equity share, with a minimum lot size of seven shares. This implies that the minimum investment required by retail investors is around ₹13,720.

Investors should take note of several key dates related to the IPO:

  * IPO Opening Date: October 15, 2024

  * IPO Closing Date: October 17, 2024

  * Tentative Listing Date: October 22, 2024

  * Anchor Investor Allocation: October 14, 2024

Reservation and Allotment

The IPO reservation structure includes:

  * 50% for qualified institutional buyers (QIBs), with up to 60% allocated for anchor investors.

  * 15% reserved for non-institutional investors.

  * 35% set aside for retail investors.

A provision of up to 7,78,400 equity shares for employees.

The basis of allotment is scheduled to be finalized on October 18, 2024, with refunds initiated by October 21, 2024.

Key Risks

While Hyundai Motor India is well-established, there are inherent risks associated with the IPO. The company relies on a limited number of suppliers for parts and materials, meaning that any disruptions in supply chains or significant price increases could adversely affect its operations.

Comparisons and Valuation

Hyundai Motor India's listed peers include major players such as Maruti Suzuki India, Tata Motors Ltd, and Mahindra & Mahindra. As of October 4, 2024, the P/E ratios of these competitors stand at:

  * Maruti Suzuki India: 17.93

  * Tata Motors Ltd: 11.36

  * Mahindra & Mahindra: 29.96

The current grey market premium (GMP) for Hyundai Motor India’s IPO ranges between ₹135 to ₹140, suggesting a strong interest from investors despite a slight downward trend in recent sessions.

As this IPO unfolds, it presents a unique opportunity for investors looking to tap into one of the most significant automotive players in India.

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This IPO marks a significant milestone not only for Hyundai but for the Indian automotive industry as a whole. Investors should carefully consider the prospects and risks associated with this offering, and stay informed as the subscription dates approach.