| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 1,865 to ₹ 1960 | 7 | 15th Oct, 2024 – 17th Oct, 2024 | ₹ 27,870.16 Cr |
About Hyundai Motor India Ltd IPO
Hyundai Motor India Ltd. (HMIL), a part of Hyundai Motor Group (third largest auto OEM in the world based on PV sales in CY23), is the second largest auto OEM in the Indian PV market since 2009. The company is engaged in the manufacturing and sales of 4W PVs. The company boasts a product portfolio of 13 models across multiple PV segments by body types, such as sedans, hatchbacks, UVs and EVs. The company also manufactures parts such as transmissions and engines for in-house consumption or sales. HMIL is also the second-largest exporter of PVs in India. The company has three manufacturing plants – two operating plants in Irrungattukottai, Sriperumbudur in Tamil Nadu – the Chennai manufacturing plant, and one plant at Talegaon in Pune in Maharashtra – Talegaon manufacturing plant, which is under redevelopment. The company has also leased a part of its Chennai facility to Mobis to assemble EV batteries. The Pune unit is an integrated passenger vehicle and engine manufacturing facility spread across approximately 300 acres of leased land allotted by the Maharashtra Industrial Development Corporation. It is under redevelopment and is expected to be operational in phases – with the first phase to be operational by the second half of Fiscal 2026. The Chennai manufacturing unit has an annual production capacity of 8,24,000 units as of June 30, 2024. The company expects an increased annual production to 9,94,000 units once the Pune unit is partly operational and to 10,74,000 units once the unit is fully operational. Further, in terms of volume breakdown, on the domestic front, 67% of the volume consists of SUVs, 21% of hatchbacks, and 12% of sedans. Meanwhile, on the exports front, 54% of the volumes consist of sedans, 28% hatchbacks and 18% SUVs. The geographic distribution of revenue from operations is as follows: India – 76.3%, Africa – 3.2%, Latin America – 7.5%, Middle East – 11.6% and others – 1.4%. For its parts and materials, the company sources 81% of its RM locally, while 19% comes from overseas markets. The company has 1,377 sales outlets across 1,036 cities and 1,561 service centres across 957 cities.
Objective of the Hyundai Motor India Ltd IPO
The company will not receive any proceeds from the issue as the entire issue is comprised of OFS.
Rationale To Invest In Hyundai Motor India Ltd IPO
Extensive portfolio and strategic expansion supported by an established brand presence augurs well for the company’s sustainable growth
HMIL boasts a diversified product portfolio, which enables it to cater to a wide customer base. The company and its 13 models can address varied customer needs across the PV segment. The company also provides multiple powertrain options, further expanding its market scope. The company’s extensive product range along with its ability to evolve with the changing consumer trends positions it well for continued growth. HMIL also offers pan-India sales, distribution, and after-sales service networks. The company has also implemented various programmes to help improve customer satisfaction and the effectiveness of after-sales services. This provides them with a competitive edge in customer reach and after-sales support. Furthermore, Hyundai’s expansion into the electric vehicle market with IONIQ 5 and its strategic approach to understanding the premium E-SUV space highlights its readiness for future market shifts. With the help of its strong brand presence in the Indian PV market, the company is well-positioned to leverage these strengths, and capitalize on the emerging market opportunities.
Strategic manufacturing and expansion to drive efficiency and market growth
To enhance operational efficiency, the company has based its manufacturing on a common platform architecture across the two facilities in Chennai. This enables the company to manufacture eight models in one facility and six different models in the other (one common model). Owing to such a structure, selected models can be produced on multiple lines in parallel at the manufacturing plant when the need arises. The common platform architecture also ensures lower product development costs, reduced time-to-market, streamlining of operations and higher capacity utilisation. To further address the market demand, the company is expanding its manufacturing capacity with the addition of the Malegaon facility. After the plant is fully operational, the company aims to maintain capacity above 90% and optimize operational efficiency with a profit-centric approach. The company further intends to leverage its local manufacturing capabilities to become Asia’s largest foreign HMC production base. The company aims to become an export hub for HMC for major emerging economies, including South Asia, LatAm, Africa and the Middle East. Additionally, the company aims to expand its customer base in India by targeting rural, tier-2, and tier-3 towns. Efforts are also being made to enhance allied businesses such as pre-owned passenger vehicle sales, benchmarking studies, and sharing improved business practices with dealers to boost efficiency and provide more business opportunities.
Valuation of Hyundai Motor India Ltd IPO
Hyundai Motor India Ltd. is a key player in the Indian automotive industry (part of Hyundai Motor Group). The company receives support from its parent in many aspects of its operations, which enables it to command a strong market presence. Owing to its wide spectrum of products catering to varied customer needs along with strong customer relationships with the help of its after-sales service, the company has a strong brand recall in the Indian market. Additionally, with the help of its strategic manufacturing and expansion plans, the company is poised to benefit from its improved efficiency and sustained market growth (in India and overseas). Besides the favourable macroeconomic factors, the changing consumer dynamics including a younger consumer base, premiumisation, and shorter replacement cycles will provide further impetus to the automotive demand. We believe that the company is well positioned to capitalize on the macro trends with the help of its diverse product portfolio and its focus on the premiumisation of its offerings. On the financial front, the company has delivered a Revenue/EBITDA/PAT CAGR growth of 21.4%/29.0%/44.5% between FY2022-24. The company reported a ROE of 56.8%, ROCE of 51.9% and D/E of 1.47x for FY24. Currently, the issue is priced at a P/E of 26.3x of FY24 earnings which we consider it on the higher end, especially given its market share. Other concerns include the issue being entirely an OFS, a high post-listing market capitalization compared to its parent company (42% of the HMC group), and the parent company’s lower valuation in its home stock exchange. Also, the recent depletion of HMIL’s cash and bank balances following hefty dividends by the Indian entity to its South Koran parent raises doubt about its expansion plans which would now be largely driven by external borrowings, thereby impacting its financial performance going ahead. Therefore, we currently recommend an AVOID rating to the issue and will reassess our rating in future following sustained business performance in upcoming quarters.
What is the Hyundai Motor India Ltd IPO?
Hyundai Motor IPO is a book built issue of Rs 27,870.16 crores. The issue is entirely an offer for sale of 14.22 crore shares. Hyundai Motor IPO opens for subscription on October 15, 2024 and closes on October 17, 2024. The allotment for the Hyundai Motor IPO is expected to be finalized on Friday, October 18, 2024. Hyundai Motor IPO will list on BSE, NSE with tentative listing date fixed as Tuesday, October 22, 2024. Login to your account now.
How to apply for the Hyundai Motor India Ltd IPO through StoxBox?
To apply for the Hyundai Motor India Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Hyundai Motor India Ltd IPO open?
Hyundai Motor India Ltd IPO is opening on 15th October 2024. .Apply Now
What is the lot size of the Hyundai Motor India Ltd IPO?
The Lot Size of Hyundai Motor India Ltd IPO is 7 equity shares. Login to your account now
When is the Hyundai Motor India Ltd IPO allotment date?
The allotment Date for Hyundai Motor India Ltd IPO is 18th October 2024. Login to your account now.
When is the Hyundai Motor India Ltd IPO listing date?
The listing Date for Hyundai Motor India Ltd IPO is 22nd October 2024. Login to your account now
What is the minimum investment required for the Hyundai Motor India Ltd IPO?
In the Retail segment the minimum investment required is Rs. 13,720. Login to your account now
What is the maximum investment allowed for the Hyundai Motor India Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 192,080. Login to your account now
What are the risks associated with investing in the Hyundai Motor India Ltd IPO?
- The company, one of its subsidiaries, and its promoter are involved in outstanding legal proceedings.
- Hyundai manufactures its passenger vehicles and parts exclusively at the Chennai manufacturing plant. Any disruptions or stoppages at this plant or the Talegaon manufacturing plant once it becomes operational could impact the company’s operations.
- Two of its Group companies, Kia Corporation and Kia India Private Limited, are in a similar line of business, which may involve conflict of interests.
When will the Hyundai Motor India Ltd IPO shares be credited to my Demat account?
The Hyundai Motor India Ltd IPO be credited to the account on allotment date which is 21st October 2024. Login to your account now
Where can I find the Garuda Construction and Engineering Ltd IPO prospectus?
The prospectus of Hyundai Motor India Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Garuda Construction and Engineering Ltd IPO?
| IPO Open Date | Tuesday, October 15, 2024 |
| IPO Close Date | Thursday, October 17, 2024 |
| Basis of Allotment | Friday, October 18, 2024 |
| Initiation of Refunds | Monday, October 21, 2024 |
| Credit of Shares to Demat | Monday, October 21, 2024 |
| Listing Date | Tuesday, October 22, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on October 17, 2024 |
