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Jai Hind! The moment that many have been eagerly waiting for has finally arrived. Today, we’ll discuss India’s largest upcoming IPO, generating a lot of excitement in the market. Investors have high hopes from this IPO. In this article, we’ll delve into the details of this IPO, its benefits and drawbacks, the company’s background, its financials, and its future prospects. This will help you make an informed decision about whether you should invest in the Hyundai IPO or not.
Introduction to the Hyundai IPO and Company Background
This IPO is being launched by one of India’s leading automobile companies, which manufactures both commercial and passenger vehicles. The company not only sells vehicles in India but also exports to international markets. It is known for its innovative, feature-rich cars. A key highlight is that the company manufactures critical components like engines and transmissions in-house, reducing its dependency on imported parts.
Having sold over 12 million vehicles, this company has achieved a significant milestone. It doesn’t just sell cars but offers a range of models including sedans, hatchbacks, SUVs, and electric vehicles (EVs). Some of its top models include the i10, i20, Verna, Creta, and Tucson. In addition, the company boasts a strong dealership and service network with 1,366 sales points and over 1,500 service centers.
Hyundai Motor IPO Details
| Hyundai Motor IPO Details | Information |
|---|---|
| IPO Date | October 15, 2024 to October 17, 2024 |
| Listing Date | [To Be Announced] |
| Face Value | ₹10 per share |
| Price Band | ₹1865 to ₹1960 per share |
| Lot Size | 7 Shares |
| Total Issue Size | 142,194,700 shares (aggregating up to ₹27,870.16 Cr) |
| Offer for Sale | 142,194,700 shares of ₹10 (aggregating up to ₹27,870.16 Cr) |
| Employee Discount | ₹186 per share |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Shareholding Pre Issue | 812,541,100 shares |
| Shareholding Post Issue | 812,541,100 shares |
Hyundai Motor IPO Reservation
| Investor Category | Shares Offered |
|---|---|
| QIB Shares Offered | Not more than 50.00% of the Net Issue |
| Retail Shares Offered | Not less than 35.00% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15.00% of the Net Issue |
Hyundai Motor IPO Timeline (Tentative Schedule)
| Hyundai Motor IPO Timeline | Tentative Schedule |
|---|---|
| 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 |
Company Financials
Before investing in any company, it’s essential to look closely at its financials. The financial journey of this company has been a bit volatile over time. Its assets grew from ₹28,000 crore to ₹34,000 crore, only to drop to ₹25,000 crore later. However, the revenue has shown good growth, rising from ₹48,000 crore to ₹71,000 crore. Though there was a slight decline in recent quarters, this might be temporary, as vehicle sales typically rise during the festive season.
The company’s margins present another positive aspect. Margins have improved consistently over the years. At ₹48,000 crore in sales, the margin was 6%, which has now increased to 8% on sales of ₹71,000 crore. This indicates the company is effectively controlling costs and increasing profitability.
Hyundai Motor India Limited Financial Information (Restated Consolidated)
| Period Ended | 30 Jun 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
|---|---|---|---|---|
| Assets | ₹25,370.24 Cr | ₹26,349.25 Cr | ₹34,573.34 Cr | ₹28,358.06 Cr |
| Revenue | ₹17,567.98 Cr | ₹71,302.33 Cr | ₹61,436.64 Cr | ₹47,966.05 Cr |
| Profit After Tax | ₹1,489.65 Cr | ₹6,060.04 Cr | ₹4,709.25 Cr | ₹2,901.59 Cr |
| Net Worth | ₹12,148.71 Cr | ₹10,665.66 Cr | ₹20,054.82 Cr | ₹16,856.26 Cr |
| Reserves and Surplus | ₹11,336.17 Cr | ₹9,853.12 Cr | ₹19,242.28 Cr | ₹16,043.71 Cr |
| Total Borrowing | ₹758.14 Cr | ₹767.92 Cr | ₹1,158.60 Cr | ₹1,140.03 Cr |
Key Performance Indicator
| KPI | Values |
|---|---|
| Market Capitalization | ₹159,258.06 Cr |
| ROCE | 13.69% |
| RoNW | 12.26% |
| P/BV | 14.93 |
Key Highlights of the Hyundai IPO
Let’s dive into the specifics of the Hyundai IPO, which will open on October 15 and remain available until October 17. The face value of this IPO is ₹10, with a price band set between ₹1,900 and ₹1,960. The total IPO size is approximately ₹28,000 crore, making it India’s largest IPO to date.
Interestingly, this IPO is entirely through Offer for Sale (OFS), meaning the promoters are selling their shares, and the money raised will go directly to them. The funds will not benefit the company directly, which means they won’t be used for business expansion or debt repayment.
Importance of Offer for Sale (OFS)
It’s important to understand the implications of an OFS. When a company brings an IPO via OFS, it signals that the company doesn’t need capital for its operations, but rather the promoters are reducing their stake. For some investors, this can be a red flag, as the company won’t directly benefit from the IPO proceeds.
However, OFS can also increase share liquidity in the market, which might attract new investors. In the long run, higher liquidity can be advantageous. Still, investors should keep in mind that the company won’t be using the money raised for its business growth.
Hyundai Motor IPO Lot Size
| Application | Lots | Shares | Amount (₹) |
|---|---|---|---|
| Retail (Min) | 1 | 7 | ₹13,720 |
| Retail (Max) | 14 | 98 | ₹192,080 |
| S-HNI (Min) | 15 | 105 | ₹205,800 |
| S-HNI (Max) | 72 | 504 | ₹987,840 |
| B-HNI (Min) | 73 | 511 | ₹1,001,560 |
What’s in It for Investors?
In this Hyundai IPO, 50% of the issue is reserved for Qualified Institutional Buyers (QIBs), 35% for retail investors, and 15% for High Net Worth Individuals (HNIs). For retail investors, this could be an excellent opportunity, as they have a significant allocation of 35%.
The lot size for the IPO is 7 shares, with a minimum application value of approximately ₹13,720. This means you can apply for a lot for under ₹14,000. For HNIs, this is a great chance to invest big, as they have 15% of the issue reserved for them.
Things to Keep in Mind While Investing
Investing in an IPO can be a great opportunity, but certain factors should be considered. Firstly, remember that the IPO operates under a lottery system. It doesn’t matter whether you apply on the first day or the last; your chances remain the same. Hence, there is no advantage to applying early.
Secondly, always apply at the higher price of ₹1,960 to increase your chances of allotment. If you apply at a lower price, your application might get rejected. Also, only one application per PAN card is allowed, so if you apply from multiple Demat accounts under the same PAN, all your applications may be disqualified.
Global and Domestic Network of the Company
The company has a manufacturing plant in Chennai, where it produces a wide range of vehicle models. It exports products not just within India but also to countries like Africa, the Middle East, Bangladesh, Nepal, and Bhutan. The company is known for its commercial and passenger vehicles, and its global network makes it a strong player in the market.
With over 1,366 sales points and 1,500+ service centers, the company is committed to providing top-notch service to its customers. This extensive network ensures the company maintains a stable position in the market for the long term.
Financial Analysis
Looking closely at the company’s financials, steady revenue growth is evident. Starting with ₹48,000 crore in sales, the company has grown to ₹71,000 crore. Although there has been a slight decline recently, sales are expected to pick up during the festive season.
Moreover, the company’s margin has been improving consistently, increasing from 6% to 8%, showing that the company is effectively managing its costs and boosting profitability.
However, the company’s assets have seen a decline, dropping from ₹34,000 crore to ₹25,000 crore, which could be a cause for concern. Investors should monitor this trend closely, as asset health is crucial for future growth.
Should You Invest in the Hyundai IPO?
Now, the big question: Should you invest in the Hyundai IPO? The answer depends on your investment profile and risk tolerance.
If you are a long-term investor, Hyundai IPO might be a good opportunity as the company has a robust global network and is one of the leading players in its field. The company’s growth and margin improvements make it a solid investment for those looking for long-term gains.
However, if you’re a short-term investor looking to make quick profits, you should be cautious. Since Hyundai IPO is entirely through OFS, the company won’t directly benefit, and stock price volatility may be high in the near term.
For long-term investors, the Hyundai IPO offers a relatively safe investment, backed by strong fundamentals and a leading market position.
Future Prospects of the Company
The future looks bright for the company, especially with the rising trend of electric vehicles. The company has already started strengthening its hold in the EV segment by introducing several electric and hybrid models, which could play a significant role in its future growth.
Government policies promoting electric vehicles may also provide a favorable environment for the company’s expansion into this segment.
Conclusion
All in all, the Hyundai IPO presents a significant opportunity in the Indian stock market. However, investors should carefully consider the OFS structure and the company’s financials before making a decision. For long-term investors who believe in the company’s fundamentals, this IPO could be a great option.
With the company’s solid market position, strong financial growth, and expansion into electric vehicles, it could become even more valuable in the future. However, short-term investors must be aware of market volatility and proceed cautiously.
We hope this detailed analysis has given you a clear perspective on the Hyundai IPO and whether it’s worth investing in. Happy investing!
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FAQ
What is the Hyundai IPO and when will it open for subscription?
- The Hyundai IPO is the initial public offering by Hyundai, a leading automobile company. The IPO is expected to open for subscription on [insert date], with the subscription period lasting for three days.
What is the price band for the Hyundai IPO?
- The Hyundai IPO price band is expected to range between [insert price range], offering investors a chance to buy shares within this range during the subscription window.
What is Hyundai IPO GMP (Grey Market Premium)?
- The Grey Market Premium (GMP) for the Hyundai IPO refers to the premium at which the shares are trading in the unofficial market before their official listing. The current GMP for the Hyundai IPO is [insert GMP value].
How can I apply for Hyundai IPO shares?
- Investors can apply for Hyundai IPO shares through online trading platforms, using their Demat account and UPI ID, or through the ASBA (Application Supported by Blocked Amount) facility available with banks.
Is investing in Hyundai IPO a good decision for long-term investors?
- Hyundai has a solid track record in the automobile industry, and its expansion into electric vehicles could make it a strong long-term investment. However, investors should consider the company’s financials and market conditions before deciding.
What percentage of Hyundai IPO is reserved for retail investors?
- In the Hyundai IPO, approximately 35% of the total issue size is reserved for retail investors, providing a significant opportunity for individual investors to participate.
When will Hyundai IPO shares be listed on the stock exchanges?
- The shares of Hyundai IPO are expected to be listed on the [insert exchange names] on [insert listing date], shortly after the completion of the allotment process.
