Hyundai Motors India IPO Gets Subdued Listing; Debuts Flat
During its subscription phase the Hyundai Motors India IPO attracts double-fold subscription. The IPO fills 2.37 times totalling to Rs 46,322 crore
The initial public offering (IPO) of Hyundai Motor India, the second-largest player with domestic market share of 14.6 per cent in the passenger vehicle market, debuted flat on the Indian bourses with a marginal discount.
Hyundai Motors India IPO listed with 1.3 per cent discount at Rs 1,934 on the National Stock Exchange (NSE).
The Rs 27,870.16 crore IPO consisted exclusively of offer-for-sale (OFS) worth with the price band fixed at Rs 1.865 to 1,960 per equity share.
The IPO opened on 15 October and closed on 17 October for the public bids. During its subscription phase the Hyundai Motors India IPO attracted double-fold subscription.
The IPO was filled 2.37 times totalling to Rs 46,322 crore. Retail category remained under subscribed and filled 50 per cent, while the subscription for qualified institutions category stood nearly 7 per cent.
Kotak Mahindra Capital, HSBC Securities, JP Morgan India, Morgan Stanley India and Citigroup Global Markets were the book running lead managers, while Kfin Technologies was the registrar to the offer.
Expert Note
"Despite the discounted listing, Hyundai Motor India's strong fundamentals, being the second-largest passenger vehicle manufacturer in India and its strategic focus on the SUV segment, continue to support its long-term growth prospects," said Shivani Nyati, Head of Wealth, Swastika Investmart.
Investors who entered with a long-term perspective may consider holding the stock, as future performance will likely be driven by the company's competitive market position and product innovations, she added.
Firm’s Financials
Hyundai Motors India reported consistent growth in both top-line and bottom-line. Revenue grew at a compounded annual growth rate (CAGR) of 21 per cent to Rs 69,829 crore (in FY24) and profit after tax (PAT) grew at a CAGR of 45 per cent to Rs 6,060 crore over FY22-24, led by better sales volume and operating efficiency.
EBITDA grew at a CAGR of 29 per cent while EBITDA margins were steady in the range of 12 to 13 per cent over FY 22-24, led by localisation, favorable mix and economies of scale.
India’s domestic PV (passenger vehicles) sales volume rose at 5 per cent CAGR (FY19-24) to reach 4.2 million vehicles in FY24 and is expected to clock 4.5 to 6.5 per cent CAGR over FY24 to 29E to reach 5.2-5.7 million domestic vehicle sales, according to CRISIL.
IPO Objectives
Since the issue contained exclusively OFS components the firm will not receive any proceeds.
However, the firm will get benefits on listing in the public market which will enhance the brand’s visibility and provide liquidity to the shareholders.
