Shares of Hyundai Motor India made a muted Dalal Street debut on Tuesday as the passenger vehicle maker was listed at Rs 1,931 on BSE, a discount of 1.48 per cent over its issue price of Rs 1,960. Similarly, the stock was listed with a discount of 1.33 per cent at Rs 1,934 on BSE over the given issue price.
The listing of Hyundai Motor India has been on the expected lines, after witnessing a sharp correction during the bidding process, with even trading at discount for a brief period. Last heard, the company was commanding a premium of Rs 20-25 per share, suggesting a loss of around one per cent for the investors.
Hyundai Motor India (HMIL) saw its initial views on the day of its listing. Global brokerage firm Macquarie initiation coverage on the debutant PV player citing it is a premiumisation and growth pure play. “We believe HMIL deserves to trade at a premium PE multiple versus peers due to its favourable portfolio mix and premium positioning,” it said.
Powertrain optionality, including parent capabilities and market share upside risk from new models/powertrain launch, are medium-term positives, said Macquarie with an ‘outperform’ rating on the stock with a target price of Rs 2,235, implying 14 per cent upside to issue price.
The IPO of Hyundai Motor India was open for subscription between October 15-17. The PV player had offered its shares in the fixed price band of Rs 1,865-1,960 per share with a lot size of 7 shares. The car maker raised about Rs 27,856 crore via its primary offering was entirely an offer-for-sale (OFS) of 142,194,700 shares by its South Korean-parent Hyundai Motor Company.
The issue saw a muted bidding and was overall subscribed only 2.37 times, thanks to the push from qualified institutional bidders (QIBs), whose quota was booked 6.97 times, while the reservation for employees was subscribed 1.74 times. The portion reserved for non-institutional investors and retail investors were booked for merely 60 per cent and 50 per cent, respectively.
Another overseas brokerage firm Nomura also initiated coverage on Hyundai Motor India. The company is riding on style and technology, while ongoing premiumization should drive high-quality growth, said Nomura. Long runway for Indian car industry – current penetration at 36 cars per 1,000 people, it said.
“Estimates to deliver 8 per cent volume CAGR over FY25-27F driven by 7-8 new models (including facelifts) and its Ebitda margins to improve to 14 per cent by FY27F from 13.1 per cent in FY24 led by improving mix, cost reduction & operating leverage,” added Nomura with a target price of Rs 2,472 and a ‘buy’ tag, suggesting a upside of 26 per cent in the stock.
Hyundai Motor India is a part of South Korea’s Hyundai Motor Group, which is the third largest auto original equipment manufacturer (OEM) in the world based on passenger vehicle sales. The Chennai-based company manufactures and sells four-wheeler passenger vehicles, including models such as sedans, hatchbacks, SUVs, and electric vehicles (EVs).
Brokerages mostly had a positive view on the issue and suggest subscribing for a long-term. Kotak Mahindra, HSBC Securities & Capital Markets, Citigroup Global Markets India, JP Morgan India and Morgan Stanley India were the book running lead managers of the Hyundai Motor IPO, while Kfin Technologies served as the registrar for the issue.
