Hyundai Motor IPO GMP falls below Rs 100; what is hurting India's no. 2 PV player?

Hyundai Motor IPO GMP falls below Rs 100; what is hurting India's no. 2 PV player?

Hyundai Motors India is losing its steam in the grey market as the premium has been slumping gradually as the latest GMP is suggesting a miniscule listing pop for the investors.

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The South Korean parent Hyundai Motor Company took more than two decades to launch this issue, which is entirely an offer for sale of up to 14,21,94,700 equity shares.The South Korean parent Hyundai Motor Company took more than two decades to launch this issue, which is entirely an offer for sale of up to 14,21,94,700 equity shares.
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Pawan Kumar Nahar
  • Oct 14, 2024,
  • Updated Oct 14, 2024 11:11 AM IST

The initial public offering (IPO) of Hyundai Motor India (HMIL) is set to kick-off for bidding on Tuesday, October 17. The Rs 27,856 crore issue shall be the largest primary offering of the Indian stock markets, which shall be sold in the range of Rs 1,865-1,960 per share, with a lot size of seven equity shares, until Thursday, October 17.

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A report from IIFL Securities said that the company's valuations are attractive, relative to other listed OEMs in India. "Hyundai has several facets of operational superiority compared to its peers, but believes that the MPV segment is a portfolio gap, which may be addressed soon. However, a potential weakness in the PV industry in FY25 is a major concern," said the brokerage firm.

Hyundai Motors India has been actively launching innovative products and refreshes; its pipeline includes a Creta EV and three other EVs, said Nuvama Institutional Equities. Globally, Hyundai has a wide portfolio of EVs and hybrids, and there is scope for launching these models in India in the future. HMIL offers 13 models in India compared with 40-plus models globally, it said.

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Currently, imports account for 20 per cent of the company’s COGS (cost of goods sold), but it plans to reduce this through localisation efforts, in areas of powertrain parts, automatic transmission, ADAS parts, EV batteries & more. "HMIL has acquired General Motors’ Talegaon plant, which will increase its production capacity by 0.17 million in H2FY26E and 0.08 million by FY28E," Nuvama added.

The domestic PV industry is an oligopolistic market with few players dominating the entire industry. Maruti Suzuki leads the PV industry in terms of domestic sales volumes. Motor (HMIL) is the second largest contributor to the domestic sales, with 14-15 per cent market share as one of the prominent export players from India, said Sharekhan.

This is due to continued traction for popular SUV models. HMIL has planned for an offer for sale under which the promoter is offloading its 17.5 per cent stake in the company. HMIL has strong parentage, relevant product profile, robust market positioning and healthy financial profile. At the upper price band, its underlying P/E valuation of 26.3 times on its FY24 earnings, it said.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

The initial public offering (IPO) of Hyundai Motor India (HMIL) is set to kick-off for bidding on Tuesday, October 17. The Rs 27,856 crore issue shall be the largest primary offering of the Indian stock markets, which shall be sold in the range of Rs 1,865-1,960 per share, with a lot size of seven equity shares, until Thursday, October 17.

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A report from IIFL Securities said that the company's valuations are attractive, relative to other listed OEMs in India. "Hyundai has several facets of operational superiority compared to its peers, but believes that the MPV segment is a portfolio gap, which may be addressed soon. However, a potential weakness in the PV industry in FY25 is a major concern," said the brokerage firm.

Hyundai Motors India has been actively launching innovative products and refreshes; its pipeline includes a Creta EV and three other EVs, said Nuvama Institutional Equities. Globally, Hyundai has a wide portfolio of EVs and hybrids, and there is scope for launching these models in India in the future. HMIL offers 13 models in India compared with 40-plus models globally, it said.

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Currently, imports account for 20 per cent of the company’s COGS (cost of goods sold), but it plans to reduce this through localisation efforts, in areas of powertrain parts, automatic transmission, ADAS parts, EV batteries & more. "HMIL has acquired General Motors’ Talegaon plant, which will increase its production capacity by 0.17 million in H2FY26E and 0.08 million by FY28E," Nuvama added.

The domestic PV industry is an oligopolistic market with few players dominating the entire industry. Maruti Suzuki leads the PV industry in terms of domestic sales volumes. Motor (HMIL) is the second largest contributor to the domestic sales, with 14-15 per cent market share as one of the prominent export players from India, said Sharekhan.

This is due to continued traction for popular SUV models. HMIL has planned for an offer for sale under which the promoter is offloading its 17.5 per cent stake in the company. HMIL has strong parentage, relevant product profile, robust market positioning and healthy financial profile. At the upper price band, its underlying P/E valuation of 26.3 times on its FY24 earnings, it said.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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