Hyundai Motor India Limited (HMIL) shares made a muted entry on the National Stock Exchange (NSE) on October 22, 2024, debuting at ₹1,934, which represents a 1.32% discount to its initial public offering (IPO) price of ₹1,960. This listing has raised eyebrows among investors who were optimistic about the company's potential, given its status as a wholly owned subsidiary of Hyundai Motor Company (HMC).

In line with HMC’s global brand vision of “Progress for Humanity,” Hyundai Motor India has been focused on sustainable manufacturing operations and is committed to offering cutting-edge mobility solutions. The IPO, which raised a staggering ₹27,870.16 crores, consisted entirely of an offer for sale of 1,421.94 lakh shares.

The subscription window for the Hyundai Motor India IPO was open from October 15 to October 17, 2024, with the allotment expected to be finalized around October 18, 2024. Following this, the shares were slated to list on both the BSE and NSE on October 22, 2024.

The share price band for the Hyundai Motor India IPO was set between ₹1,865 and ₹1,960 per equity share, with a minimum lot size of 7 shares. This meant that retail investors needed to commit at least ₹13,720, while high-net-worth individuals (HNIs) were required to invest in a minimum of 15 lots (105 shares), totaling ₹2,05,800.

The IPO was well-managed, with several reputable book-running lead managers involved, 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 this significant issue was KFin Technologies Limited.

Hyundai Motor India Limited IPO GMP Today

In terms of the grey market, the Grey Market Premium (GMP) for Hyundai Motor India Limited’s IPO was reportedly ₹0, indicating muted expectations for trading post-listing. Investors should note that the grey market does not provide a reliable mechanism for price discovery. The GMP is solely based on demand and supply dynamics in an unregulated environment and should be treated cautiously.

Hyundai Motor India Limited IPO Live Subscription Status

As of 9:00 PM on October 17, 2024, the live subscription status of the Hyundai Motor India IPO showed a robust demand, having been subscribed 2.37 times on its final day of subscription. For real-time updates on the Hyundai Motor India IPO Live Subscription Status, investors can check the official BSE website.

Hyundai Motor India Limited IPO Anchor Investors Report

Hyundai Motor India successfully raised ₹8,315.27 crores from a select group of anchor investors at a price of ₹1,960 per share. The company allocated 42,424,890 equity shares to these investors, showcasing strong institutional interest in the offering.

Important Notes

Investors should be aware that shares allocated to anchor investors are derived from the Qualified Institutional Buyers (QIBs) reservation portion. The number of shares mentioned in the IPO subscription table is calculated at the lower end of the price band, while those in the IPO details section reflect the upper end. It’s essential to note that market maker portions, if any, are included in the Non-Institutional Investors (NIIs) reservation.

Hyundai Motor India Limited IPO Allotment Date - Step by Step Guide to Check Allotment Status Online

The allotment date for the Hyundai Motor India IPO is set for October 18, 2024. Investors can check their allotment status by navigating to the registrar's website and selecting Hyundai Motor India Limited from the dropdown list. After entering the application number, PAN, or DP Client ID, they can quickly ascertain their allotment status.

Objectives of Hyundai Motor India Limited IPO

It is crucial to highlight that Hyundai Motor India will not benefit directly from the proceeds of this offer; instead, all proceeds will be directed to the Promoter Selling Shareholder after deducting offer-related expenses and applicable taxes.

Financial Performance

Hyundai Motor India has shown remarkable financial growth over the past few years. The company reported revenues of ₹7,13,023.25 million in Fiscal 2024, compared to ₹6,14,366.42 million in Fiscal 2023 and ₹4,79,660.48 million in Fiscal 2022. The earnings before interest, taxes, depreciation, and amortization (EBITDA) figures also reflect this growth, with ₹91,326.16 million in FY2024, an increase from ₹75,487.80 million in FY2023 and ₹54,860.89 million in FY2022. Notably, the profit after tax (PAT) for FY2024 stood at ₹60,600.44 million, showcasing a clear upward trajectory in profitability.

For the Hyundai Motor India IPO, the company is issuing shares at a pre-issue EPS of ₹74.58, while the post-issue EPS remains the same. The pre-issue P/E ratio is calculated at 26.28x, which appears to be fairly valued when compared to its peers. Hyundai’s Return on Capital Employed (ROCE) for FY24 is an impressive 62.90%, alongside a Return on Equity (RoE) of 56.82%.

Concerns and Challenges

However, several concerns could impact the long-term outlook for investors:

Risk of Increased Royalty Payments: The parent company might raise royalty fees, potentially squeezing profit margins.

High Promoter Holding and Pending Stake Sale: The promoters retain an 82.5% stake post-listing, with a 7.5% stake sale still to come, raising fears of increased market supply.

Missed Wealth Creation Opportunity: Unlike other successful IPOs like Maruti Suzuki, Hyundai is only now entering the market after maximizing its growth potential.

Competition from Group Company KIA Motors: Direct competition from KIA Motors could limit Hyundai's market share and growth.

Valuation Concerns: Hyundai currently holds only 6% of the total industry sales and 8% of the profits, yet it is seeking a 42% market capitalization share.

PE Valuation Mismatch: With a 14-15% market share in India, Hyundai is aiming for a PE ratio of 27x, akin to Maruti Suzuki which commands a 40% market share. In contrast, Tata Motors trades at a PE of 11x, and Mahindra & Mahindra at 35x.

Given these factors, the grey market is indicating a GMP of 0%, suggesting minimal expectation for listing gains. Therefore, potential investors are advised to exercise caution regarding the Hyundai Motor India Limited IPO for either short-term trading or long-term investment.

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