Hyundai Motor India IPO: What to Expect and How to Navigate It

Hyundai Motor India's highly anticipated IPO is scheduled to debut on October 15, 2024. This public offering could potentially become the largest in the history of the Indian stock market. Hyundai, a well-known brand in the automotive industry, is offering investors the opportunity to own a portion of its thriving Indian operations.

Let’s have an in-depth look at the Hyundai IPO, plus how HDFC Sky’s ‘One-Click IPO’ feature streamlines the investment process.

With a price range of ₹1865 to ₹1960 per share and a lot size of 7 shares, this IPO is attracting considerable attention from investors, both individual and institutional. If you are thinking of diving into this historic offering, ensure you open demat account through the best trading app in India for a seamless investment experience.

Hyundai Motor India: A Legacy of Success

Hyundai Motor India, a division of the global Hyundai Group, has become a major force in the Indian automotive market since its establishment in 1996. Offering a diverse range of 13 models, including sedans, hatchbacks, SUVs, and electric vehicles, Hyundai currently holds a significant 15% share of the domestic car market. This positions the company as the second-largest carmaker in India, following Maruti Suzuki.

Hyundai's extensive network of over 1,366 sales outlets and 1,550 service centers across India ensures strong penetration in both urban and rural areas. This widespread presence is a key factor contributing to the upcoming IPO's appeal to investors seeking to capitalize on the company's future growth potential.

Hyundai Motor India IPO Details

The Hyundai IPO opens on October 15, 2024, and closes on October 17, 2024. With a lot size of 7 shares, each costing between ₹1865 and ₹1960, the minimum investment required is ₹13,720. This issue is entirely an offer-for-sale, with Hyundai’s promoter offering 14.2 crore shares, aiming to raise approximately ₹27,870 crore. As a potential investor, it's essential to understand the timeline:

The allotment status will be available on both the registrar and stock exchange websites and the UPI mandate deadline is set for 5 PM on October 17. For institutional investors, the lock-in period for anchor investors is 30 days for 50% of the shares and 90 days for the remainder.

The easiest way to subscribe to the Hyundai IPO is by using a reliable stock trading app that allows seamless integration with a Demat account.

Why Hyundai’s IPO?

Hyundai's success in the Indian market is driven by its strong product lineup, featuring popular models such as the Creta, i20, and Verna. Since 2005, Hyundai has also held the position of India's largest exporter of passenger vehicles, demonstrating its dominance in both domestic and global markets. Since 1998, the company has sold approximately 12 million passenger vehicles worldwide.

Hyundai's status as the world's third-largest OEM in the passenger vehicle segment is a significant advantage that appeals to potential investors. However, while this impressive achievement is noteworthy, it's essential to carefully evaluate both the potential benefits and risks before making an investment decision.

Many apps available today make this process simple and efficient. The best Indian stock market trading app should offer seamless access to IPO applications, quick allotment status checks, and real-time updates on listings.

Hyundai IPO: Strengths and Risks

Strengths:

• Market Leadership: Hyundai has been the second-largest player in the Indian auto market since 2009, maintaining steady dominance in the passenger vehicle segment.
• Export Powerhouse: Hyundai’s reputation as India’s largest exporter of passenger vehicles adds to its global footprint, providing revenue streams beyond just domestic sales.
• Innovation and EV Transition: Hyundai is leading the charge in electric vehicle (EV) adoption with its Ioniq 5, positioning itself well for the future as India transitions to greener technologies.

Risks:

• Dependency on SUV Sales: A significant portion of Hyundai’s revenue stems from its SUV segment. Any slowdown in SUV demand could adversely impact its financial performance.
• Operational Centralisation: Hyundai's operations are heavily dependent on its Chennai plant. Any disruptions at this facility could affect its production capacity and financial stability.
• Tax and Policy Fluctuations: Changes in tax laws, particularly those affecting the automobile industry, could have an impact on Hyundai’s profitability.

As with any IPO, weighing these strengths against potential risks is vital for making an informed investment decision. An option trading app helps mitigate risks with real-time data, risk management tools, stop-loss orders, and strategic trade execution.

Hyundai IPO Valuations and Financial Performance

Hyundai's upcoming IPO is expected to offer a substantial stake in its Indian subsidiary. Market analysts estimate that the parent company may sell up to 17.5% of its holdings. In the nine months ending in FY24, Hyundai Motor India reported a profit after tax (PAT) of ₹44 billion.

Assuming a 5% annual growth rate, the PAT could reach ₹68 billion by FY27. Based on this projection, the IPO valuation at its highest point might result in a price-to-earnings (P/E) ratio of 24x. While this valuation is not unreasonable, it highlights the significant premium that investors may need to consider before subscribing.

How to apply for IPO using HDFC Sky's One-Click feature

The One-Click IPO feature on HDFC Sky streamlines the application process for IPOs, making it easy and efficient. To apply for the Hyundai IPO, follow these steps:

• Login to HDFC Sky: Start by logging into your HDFC Sky account with your credentials.
• Go to the IPO section: Navigate to "Indian Stocks" in your profile and click on "IPO."
• Choose the Hyundai IPO: Locate the Hyundai IPO and click "Apply Now."
• Enter your bid: Provide your bid details and make any necessary customisations.
• Proceed with payment: Select UPI as your payment option.
• Approve the mandate: Open your UPI or banking app to approve the payment mandate.
• Confirm your order: Finalise your application by confirming and placing your order.

Key features of HDFC Sky’s One-Click IPO include:

• Simple application process: Apply for the IPO with a single click, minimising paperwork and errors.
• Real-time updates: Get instant notifications regarding your application status, allotment results, and refunds.
• Unified management: Manage all IPO investments seamlessly from one platform.
• Accessible anywhere: Apply using the HDFC Sky mobile app or online portal for convenience.

The Hyundai IPO represents a significant investment opportunity, combining growth and stability. Thanks to HDFC Sky’s One-Click IPO feature, the application process is more accessible and efficient. Don’t miss this chance to participate in this major market event.

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