Hyundai Motor India IPO: Key takeaways from draft papers, share price target for Maruti Suzuki 

With Hyundai Motor India filing draft papers with the market regulator Sebi for its initial public offering (IPO), the Street has already started drawing its comparison with the largest passenger car maker Maruti Suzuki India.

Hyundai Motor India is the second-largest PV OEM by volumes. It is believed that its IPO will hit the market within 4-6 months.

Emkay Global said the domestic PV industry, as per Hyundai's draft IPO papers, could grow in mid-single digit (4.5-6.5 per cent) till FY29 with rising contribution from alternative fuels (CNG, EVs, strong hybrids) and SUVs.

Hyundai's India operations are gaining significance within global Hyundai and that India's positioning within domestic and exports will be supported further, IPO draft papers suggested, as per Emkay Global. Hyundai Motor India is aiming to continue its strong premiumisation focus with actions across ICE and EVs, the domestic brokerage said.

"We note that HMIL enjoys superior profitability metrics compared with MSIL amid better mix (63 per cent contribution from SUVs vs 25 per cent for MSIL) and premium positioning, though partially offset by lower scale. We maintain REDUCE on MSIL with unchanged estimates as well as target price of Rs 11,200," it said.

Emkay Global said Hyundai is aiming to maintain capacity utilisation above 90 per cent against 97 per cent as of December 2023 by optimizing domestic and exports mix.

It intends to develop India as an export hub for emerging markets incl. South Asia, Latin America, Africa, and the Middle East.

Hyundai has 4 EV model launches planned going forward, including electric Creta in Q4FY25.

"The company is taking steps to develop EV manufacturing in India along with related supply chain across Tamil Nadu and Maharashtra with Rs320bn investment commitment (outlined in aggregate). The focus on high localization levels in EVs, along with introduction of EV-specific platform, is expected to help reduce costs and improve price competitiveness," Emkay GLOBAL said.