Hyundai Motor India Limited (HMIL), a subsidiary of Hyundai Motor Group, is planning a major initial public offering (IPO) in India. Here’s a summary of the key details and analysis to help you understand the potential investment opportunity:

Timeline

IPO Open Date:	15 Oct 2024
IPO Close Date:	17 Oct 2024
Basis of Allotment:	18 Oct 2024
Refunds:	21 Oct 2024
Credit to Demat Account:	21 Oct 2024
IPO Listing Date:	22 Oct 2024

About Company

Hyundai Motor India Limited (HMIL) is a wholly-owned subsidiary of Hyundai Motor Company, headquartered in South Korea. Established in 1996, HMIL has grown to become the second-largest car manufacturer in India. Here’s a detailed look at the company:

Operations:

• Manufactures passenger cars across various segments (sedans, hatchbacks, SUVs) at two plants in India (Gurgaon and Chennai).
• Sells cars through a vast network of dealerships across India.
• Also offers after-sales service and spare parts through its dealership network.

Products:

• Offers a diverse product portfolio catering to a wide range of customer preferences and budgets.
• Popular models include:
  • Grand i10 NIOS (hatchback)
  • Aura (sedan)
  • Creta (SUV)
  • Venue (compact SUV)
  • Kona Electric (electric SUV)
• Recently entered the electric vehicle (EV) segment with the Kona Electric and is committed to expanding its EV portfolio.

Market Position:

• Holds a strong second position in the Indian car market with a significant market share.
• Enjoys brand recognition and customer loyalty due to its focus on quality, design, and features.
• Established dealer network ensures wide reach and accessibility for customers.

Future Outlook:

• Aims to capitalize on the growing Indian car market, driven by rising disposable incomes and increasing demand for personal transportation.
• Plans to expand its electric vehicle (EV) portfolio to align with government initiatives promoting electric mobility.
• Focuses on innovation and developing new models to cater to evolving customer preferences.

Official Website: Visit Here

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Objective

• Capital Raising: Hyundai aims to raise funds for expansion plans, potentially including setting up a battery pack assembly unit and expanding its electric vehicle (EV) business in India.
• Brand Visibility: The IPO will increase brand awareness and potentially enhance Hyundai’s valuation in the Indian market.
• Liquidity for Investors: Existing shareholders can exit their investment through the OFS component of the IPO.

POSITIVE

• Market Leader: Hyundai is the second largest carmaker in India with a strong brand presence and established dealer network, giving them a significant advantage in a competitive market.
• Diverse Product Portfolio: They offer a wide range of cars across various segments, catering to a broad customer base and potentially mitigating risk from fluctuations in any single segment’s popularity.
• Focus on Growing Segments: Their focus on popular SUV segments like Creta and Venue aligns well with the growing demand in the Indian market.
• Entry into Electric Vehicles: Hyundai has already launched electric vehicles and plans to expand their EV portfolio, positioning them well for the future and government initiatives promoting electric mobility.
• Potential for Growth: The Indian car market is expected to experience continued growth, driven by rising disposable incomes and increasing demand for personal transportation, which could benefit Hyundai.
• Brand Visibility and Liquidity: The IPO itself will increase brand awareness and potentially enhance Hyundai’s valuation, while existing shareholders can gain liquidity through the Offer for Sale component.

NEGATIVE

• Dependence on Single Market: A significant portion of Hyundai’s revenue comes from India, making them vulnerable to economic fluctuations within the country. An economic slowdown could significantly impact sales and profitability.
• Fierce Competition: The Indian car market is fiercely competitive with established players like Maruti Suzuki and emerging players like Tata Motors. Hyundai will need to maintain a competitive edge.
• Rising Input Costs: Fluctuations in the prices of raw materials like steel can impact Hyundai’s production costs and profitability, squeezing margins.
• Shifting Consumer Preferences: Changes in consumer preferences towards alternative mobility solutions like ride-sharing or electric scooters could pose a challenge to traditional car manufacturers.
• Regulatory Environment: Evolving regulations related to emission standards and safety norms can increase production costs and require adaptation, impacting profitability.
• Valuation: Without a price band announcement yet, it’s difficult to assess if the IPO is priced fairly. A high valuation might not be attractive for investors.

So,how does Hyundai Motor India IPO Fare in Terms of Financials ?

Financial Details

Period Ended	30 Jun 2024	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets	25,370.24	26,349.25	34,573.34	28,358.06
Revenue	17,567.98	71,302.33	61,436.64	47,966.05
Profit After Tax	1,489.65	6,060.04	4,709.25	2,901.59
Net Worth	12,148.71	10,665.66	20,054.82	16,856.26
Reserves and Surplus	11,336.17	9,853.12	19,242.28	16,043.71
Total Borrowing	758.14	767.92	1,158.6	1,140.03
Amount in ₹ Crore

FINANCIAL REVIEW

Positives:

• Revenue Growth: The company has experienced significant revenue growth, particularly from Q1 2024 to Q2 2024, indicating strong project execution and increased market share.
• Profitability: Profit after tax (PAT) has also increased, although at a slower pace than revenue. This suggests that the company is managing costs effectively.
• Asset Growth: Assets have declined from Q1 2024, which could be due to various factors such as asset sales or completion of projects.
• Net Worth and Reserves: A healthy increase in net worth and reserves suggests a strong financial position.
• Debt: Total borrowing has decreased, indicating improved financial discipline and reduced reliance on debt financing.

Hyundai Motor India IPO Review & Details IPO Valuation :

Earning Per Share (EPS):	₹ 74.58 per Equity Share
Price/Earning P/E Ratio:	26.28
Return on Net Worth (RoNW):	12.26%
ROCE	13.69%

Hyundai Motor India IPO – SWOT Analysis

Strengths

• Market Leader: Hyundai is the second largest car manufacturer in India, with a strong brand presence and established dealer network.
• Diverse Product Portfolio: They offer a wide range of cars across various segments (sedans, hatchbacks, SUVs), catering to a broad customer base.
• Focus on SUVs: The growing SUV segment in India positions Hyundai well, with popular models like Creta and Venue.
• Entry into Electric Vehicles: Hyundai has launched electric vehicles like the Kona Electric and is committed to expanding its EV portfolio, aligning with the government’s push for electric mobility.

Weaknesses

• Dependence on Indian Market: A significant portion of Hyundai’s revenue comes from India, making them vulnerable to economic fluctuations within the country.
• Competition: The Indian car market is fiercely competitive, with established players like Maruti Suzuki and emerging players like Tata Motors vying for market share.
• Rising Input Costs: Fluctuations in the prices of raw materials like steel can impact Hyundai’s production costs and profitability.

Opportunities

• Growing Indian Car Market: The Indian car market is expected to experience continued growth, driven by rising disposable incomes and increasing demand for personal transportation.
• Government Support for EVs: Government incentives and policies promoting electric vehicles present an opportunity for Hyundai to expand its EV market share.
• Export Potential: Hyundai can leverage its established manufacturing base in India to increase exports to neighboring countries.

Threats

• Economic Downturn: An economic slowdown could decrease demand for cars and impact Hyundai’s sales and profitability.
• Shift in Consumer Preferences: Changes in consumer preferences towards alternative mobility solutions like ride-sharing or electric scooters could pose a challenge.
• Stringent Regulations: Evolving regulations related to emission standards and safety norms can increase production costs and require adaptation.

COMPETITIVE ANALYSIS: MARKET PEERS

Hyundai Motor Company operates in a highly competitive global automotive market. Its primary competitors include:

Peers:

• Toyota Motor Corporation: One of the world’s largest automakers, known for its reliability and fuel efficiency.
• Volkswagen AG: A global automotive giant with a diverse range of brands and models.
• General Motors Company: A major American automaker with a strong presence in the global market.
• Ford Motor Company: Another major American automaker, offering a wide range of vehicles.
• Nissan Motor Company: A Japanese automaker known for its innovative designs and affordable pricing.

Hyundai Motor India IPO GMP

• Grey market premium as on 17-10-2024 = Rs 17/ Share

Disclaimer:

• IPO Grey Market Premium (Hyundai Motor India IPO GMP) mention is valid for the specific date as mentioned in the header.
• We are not buying and selling IPO forms on IPO Grey Market.
• Don’t decide to subscribe to an IPO just based on the initial price, as it can change before the listing.Subscribe only considering Fundamentals of the companies.

Hyundai Motor India IPO

🔴 Live Subscription Status 🔴

17/10/2024 5:00 PM

	NO OF SHARES OFFERED	Day 1	Day 2	Day 3
Qualified Institutional Buyers(QIBs)	2,82,83,260	0.05	0.58	6.97
Non Institutional Investors(NIIs)	2,12,12,445	0.13	0.26	0.60
Retail Individual Investors(RIIs)	4,94,95,705	0.26	0.38	0.50
Employees	7,78,400	0.79	1.31	1.74
Total	9,97,69,810	0.18	0.42	2.37

FINAL TAKEAWAY

✅ Avoid

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Many other aspects that also need to be considered. Consequently, I will cover those topics in my video on Youtube. Furthermore, I aim to provide a thorough analysis that will help investors make informed decisions. Additionally, stay tuned for more updates and insights.

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