Is Hyundai IPO Overpriced? Subscribed Only 0.18x on Day 1

India’s second-largest car manufacturer Hyundai Motors India has opened for subscription today. The IPO will remain open for subscription from October 15, 2024 (Tuesday) and will close on October 17, 2024 (Thursday). The company has fixed the price band of its share between Rs.1865 to Rs. 1960 per equity share. Hyundai Motor IPO will conducted through an offer for sale, which means the entire proceeds from the public issue will go to the company’s selling shareholders. 

Hyundai Motor IPO Details 

Hyundai IPO Share Price: Hyundai Motor IPO is set at a price band of Rs.1,865 to Rs. 1,960. This means you require an investment of Rs. 13,055 if you are bidding at the lower price band and Rs.13,720 if you are bidding for the IPO at the upper price band.

Hyundai IPO Listing Date: Hyundai Motor IPO is open to subscription from October 15, 2024, to October 17, 2024, and the company will be listed in the NSE and BSE on October 22, 2024

Hyundai IPO Subscription Status: Hyundai Motor IPO is subscribed at 0.18 times as of  October 15, 2024, 19:02 IST. The public issue is subscribed 0.27 times in the retail category, 0.05 times in QIB, and 0.13 times in the NII category.

Hyundai IPO Allotment Status: The shares from Hyundai Motor IPO will be allotted to its investors on October 18, 2024. One can check the allotment status from Hyundai Motors registrar KFin Technologies Limited, the BSE website, or your broking platform where you have applied for the Hyundai Motor IPO.

What Can We Expect From the Hyundai IPO?

Hyundai Motor IPO Review:  Hyundai Motors India Limited is the second largest car manufacturer in the country with a product segment comprising 13 models across various segments, including sedans, hatchbacks, sports utility vehicles (SUVs), and battery electric vehicles (EVs), catering to diverse consumer preferences in India.

The company operates through its three manufacturing plants situated in Tamil Nadu and Maharashtra. Over the years, it has built its presence in India by establishing 1,377 sales outlets across 1,036 cities and towns in India as of June 30, 2024 

Talking about the financial performance of Hyundai Motors India, we can see that the company has consistently increased its revenue and profits each financial year. As of FY24, the company generated an operating revenue of Rs.69,829 crores and sold a total of 7,77,876 cars. From its total revenue, the company was able to maintain a net profit of Rs.4,709.25 crores with a net profit margin of 8.5% which also improved each year indicating improved operating efficiency. Furthermore, the company has reported an ROCE of 63% in FY24, although it is majorly because of the significant reduction in the reserve and surplus of the company.

The company faces intense competition in the Indian automotive sector, with Maruti Suzuki, Tata Motors, and Mahindra & Mahindra collectively controlling about 80% of the market. Moreover, the company is the smallest among its listed peers in terms of revenue despite holding the position of the second-largest car manufacturer. 

Based on the upper price band mentioned for the Hyundai IPO, the company has a PE ratio of 26.28 which is close to that of Maruti Suzuki (29.38) and Mahindra & Mahindra (29.96). On the contrary, Tata Motors Limited, which is the largest company among its peers in terms of revenue has a PE of 11.36 despite delivering significant returns in recent times. 

Thus, investors should consider investing in Hyundai IPO only after thoroughly researching the company and not base their investment decisions solely on Hyundai IPO GMP. 

For a detailed analysis of Hyundai Motor IPO, read our article ‘Is Hyundai IPO Good or Bad - Detailed Review’