Hyundai Motor India IPO Sees Steady Start, Faces Valuation Concerns
Hyundai Motor India Ltd launched its much-awaited Initial Public Offering (IPO) on D-Street on Tuesday, October 15. Total orders reached 18% on the first day of the offering bid, and it showed steady progress. Non-institutional investors contributed 13% and retail investors contributed 26%. Only 5% worked with qualified institutional customers (QIBs), while 79% were commercial customers, setting the sector apart.
Despite the excitement over its unprecedented Life Insurance Corporation of India (LIC) IPO, experts have cited pricing concerns for Hyundai. While market watchers are worried about its pricing, investors are excited about the largest initial public offering (IPO) in India’s history.
Established in 1996, Hyundai Motor India is a major force in the Indian automotive industry and is known for its Venue, Creta and i20 models. South Korea-based Hyundai Motor offers 17.5% ownership by way of 142.2 million tonnes of shares, but the Indian subsidiary does not issue additional shares The parent company will have a total cash flow of ₹27,870 crore, though it is not clear how this money will be distributed.
Market Insights and Concerns
Though experts warn of its challenges, Hyundai’s IPO highlights India’s booming equity capital-raising industry, which listed more than 100 companies last quarter alone Different demands from retail investors highlights intense competition, especially with the pandemic. In the latter period, the growth rate of automobile demand decreases.
Expert Opinions
According to Mohit Gulati, CIO, ITI Growth Opportunity Fund, Hyundai’s valuation of ₹1,960 per share is equivalent to a valuation of 30 times its FY25 figures and 26 times its FY24 earnings Suggesting a more realistic range of ₹1,700–1,860,000. Gulati added, “While Hyundai is a beloved brand, the timing of its IPO in a bull market of equity is not favorable for investors.”
According to Prashant Tapse, senior VP of research at Mehta Equities, the offering appears to be fully valued based on FY25 earnings forecast, leaving little opportunity for immediate returns. Though Hyundai India contributes only marginal global sales and profits, it is seeking higher prices than its parent company, he said.
While the gray market premium initially excited promoters, it has since declined, raising questions about the value of the transaction, according to Arun Kejriwal, founder of Kejriwal Research and Investment Services shows him. According to Kejriwal, the stock is more suitable for long-term investors, especially given the company’s intention to increase production and EV offerings over the next year.
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