Hyundai Motor India Shares List At 1.5% Discount Over IPO Price, Analysts Initiate Buy
Nomura initiated coverage on Hyundai India with a 'buy' whereas Macquarie rated the stock 'outperform'.
(Source: Hyundai Motor Group on Unsplash)
Hyundai Motor India Ltd.'s shares listed at Rs 1,934 on the NSE on Tuesday, a discount of 1.3% over the issue price of Rs 1,960 apiece. It debuted on the BSE at a discount of 1.5% at Rs 1,931.
Hyundai Motor India is part of the Korea's Hyundai Motor Group. The company is India's second largest passenger vehicle maker after Maruti Suzuki India Ltd. With a market share of 24% as of June 2024, its portfolio includes sedans, hatchbacks, sports-utility vehicles and battery-electric vehicles.
The carmaker's sales are driven by models such as Creta, Venue, i20, Exter and Nios brands.
“We always knew India was the future and kept investing in this market for 28 years,” said Euisun Chung, executive chairman, Hyundai Motor Co.
Euisun Chung, executive chairman, Hyundai Motor Co., during the listing ceremony of Hyundai Motor India at NSE in Mumbai.
Analysts Bullish Despite Tepid Debut
Nomura initiated coverage on Hyundai Motor India with a 'buy' rating and a target price of Rs 2,472 apiece, implying an upside of 27.82% from opening price. The brokerage said the company has been focused on stylish and technology-rich cars right early on, which has resulted in a robust business model with rising SUV mix. This bodes well with Indian demand trends shifting to more premium cars.
The brokerage estimates the automaker to deliver 8% volume growth on a compounded annual basis in the next three years driven by 7–8 models.
Macquarie started 'outperform' rating on the stock with an upside of 15.56% at Rs 2,235 target price. The firm said Hyundai Motor India deserves to trade at a premium PE multiple versus peers due to its favourable portfolio mix and premium position.
Institutions Drove Hyundai India IPO Demand
Hyundai Motor India IPO, the nation's largest to raise up to Rs 27,870 crore, was subscribed 2.37 times last week, with bids led by qualified institutional buyers. The company had set a price band of Rs 1,865–1,960 per share for its three-day IPO, which was a pure offer for sale of 14.2 crore shares.
Qualified institutional buyers bid for 19.72 crore shares against the 2.82 crore shares on offer, subscribing their portion by 6.97 times. Non-institutional investors subscribed 60% of the portion allocated for them, while retail investors bid for 50% of the shares reserved for them.
Employees subscribed their quota by 1.74 times, applying for 13.56 lakh shares against the 7.78 lakh shares reserved for them.
The allotment of shares in the Hyundai Motor India IPO was done on Oct. 18.
Chief Operating Officer Tarun Garg explained how the IPO marks the second phase of Hyundai Motor India's growth story, presenting opportunities for both local and global investors. "We are the second-largest player in the passenger vehicle segment in India, and this IPO is a key milestone in our growth journey," he said.
