Hyundai Motor India (HMIL) is gearing up for its highly anticipated initial public offering (IPO) on October 15, with the bidding process open until October 17. This massive IPO is set to raise approximately ₹27,856 crore, making it one of the largest primary offerings in India to date. Shares will be priced between ₹1,865 and ₹1,960, with a minimum lot size of seven shares.
IPO Structure and Pricing Details
Hyundai Motor India : The IPO will consist entirely of an offer-for-sale (OFS) of up to 14,21,94,700 equity shares by its parent company, Hyundai Motor Company, based in South Korea. The anchor book is scheduled to be announced on October 14, ahead of the IPO opening.
As the IPO approaches, the grey market premium (GMP) for Hyundai Motor India shares has seen fluctuations. After dipping sharply to ₹111, it has recently recovered to ₹170, signaling a potential single-digit listing gain for investors. This GMP was notably higher earlier this month, reaching ₹270 and peaking at around ₹400.
Analyst Perspectives
Brokerage firms are largely optimistic about Hyundai’s IPO, highlighting the company’s strong brand presence and ongoing product launches as catalysts for long-term growth. Analysts at Arihant Capital Markets emphasize HMIL’s historical stability in the Indian market, attributing its success to robust after-sales services and an efficient distribution network bolstered by cutting-edge research and development (R&D) from Korea.
Saji John, a senior research analyst at Geojit Financial Services, notes that Hyundai’s impressive financial performance, particularly in the growing SUV segment, could significantly influence the competitive landscape in India’s listed auto sector. As HMIL continues to enhance its product offerings, other automakers may feel pressured to innovate in order to retain investor interest.
Growth Potential and Market Strategy
Hyundai’s growth strategy focuses on premiumization, aiming to increase sales of higher-end vehicle trims while maintaining competitive pricing. The company is also keen on expanding its electric vehicle (EV) segment, with plans to introduce the Creta EV by the end of FY25. This move is part of Hyundai’s broader strategy to establish a comprehensive EV supply chain and charging infrastructure tailored to meet market demands.
According to analysts at Anand Rathi Research, HMIL is committed to investing in R&D to enhance its portfolio and better serve diverse consumer needs. Currently, the company offers 13 models across key passenger vehicle segments, making it well-positioned to cater to various market demographics.
Financial Metrics and Valuation
Hyundai’s IPO is priced at a price-to-earnings (P/E) ratio of approximately 26.73 times based on FY25 annualized earnings and 26.28 times on FY24 earnings, suggesting the issue is fully priced. However, Bajaj Broking indicates that HMIL’s ongoing expansions and solid financials may provide substantial growth potential post-IPO.
The offering includes a reservation of 7,78,400 equity shares for eligible employees, who will benefit from a discount of ₹186 per share. The allocation strategy also favors institutional investors, with 50% reserved for qualified institutional bidders (QIBs), 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors.
Future Outlook
Analysts at Nuvama Institutional Equities highlight that HMIL is strategically expanding its production capacity to support domestic and international growth. Localisation efforts in manufacturing, particularly in powertrain parts, transmission, and EV batteries, are expected to bolster profitability.
As HMIL prepares for its IPO, the market will closely monitor investor sentiment, particularly given that this is the first major auto IPO in India in over two decades. The response from the investment community could set the tone for future automotive offerings and influence share prices across the sector.
In conclusion, Hyundai Motor India’s IPO presents a compelling opportunity for investors, combining a strong brand legacy with promising growth potential in both traditional and electric vehicle markets. With a strategic focus on premiumization and innovation, Hyundai aims to solidify its position in India’s dynamic automotive landscape.