Hyundai Motor India IPO: A more in-depth look

The excitement round Hyundai Motor India’s Preliminary Public Providing (IPO) has been constructing momentum ever because the automaker filed its Draft Purple Herring Prospectus (DRHP) with SEBI. Because the Indian arm of the South Korean large prepares for its inventory market debut, many buyers are desirous to see what this IPO holds for them. With wonderful gross sales data and Hyundai’s sturdy model popularity, the IPO has generated vital curiosity.

When you’re contemplating investing within the Hyundai IPO, step one is to open a demat account. A demat account lets you maintain shares and securities in an digital format, which makes it simpler to handle your portfolio.

Uncover the Hyundai IPO with an in-depth evaluation and study HDFC Sky’s time-saving ‘One-Click on IPO’ characteristic.

What You Ought to Know About Hyundai Motor India’s IPO

Hyundai Motor India, a significant participant within the Indian vehicle sector, is about to subject 14.22 crore shares by way of an Provide for Sale (OFS). The IPO will possible happen between October 15 and October 17, 2024, with an inventory date of October 22.

As soon as your demat account is about up, the following instrument you’ll want is an on-line share buying and selling app. These apps allow you to purchase, promote, and monitor shares in real-time, offering entry to numerous monetary devices, together with shares, bonds, and mutual funds.

Hyundai Motor India’s progress story

Hyundai Motor India has constantly proven sturdy progress within the Indian market. Within the first half of 2024 alone, the corporate offered over 2.7 lakh items, a 2% improve in comparison with the identical interval the earlier 12 months. The corporate has additionally made a major affect with its electrical car (EV) lineup, together with standard fashions just like the Hyundai Kona and Ioniq.

High quality of efficiency

Hyundai Motor India has delivered spectacular returns, with a three-year common Return on Fairness (ROE) of practically 27% and a Return on Capital Employed (ROCE) of about 29% from FY22 to FY24. These figures mirror the corporate’s sturdy operational effectivity and talent to generate earnings from shareholder investments.

The corporate’s Earnings Earlier than Curiosity and Taxes (EBIT) margin additionally averaged an industry-leading 9% throughout this era, showcasing Hyundai’s potential to take care of strong profitability throughout a number of monetary years.

Progress trajectory

Hyundai’s income and revenue have been rising steadily. Between FY22 and FY24, income elevated by roughly 21% yearly, whereas internet revenue surged by a powerful 45% every year.

This sturdy progress has been pushed by the rising demand for passenger automobiles (PVs) in India, notably within the premium Sport Utility Car (SUV) section. Hyundai’s strategic deal with the SUV market has led to a major shift in its income composition, with SUVs now contributing 67% of complete income, up from 52% in March 2022.

Valuation post-IPO

As soon as the IPO is accomplished, Hyundai’s inventory can be valued at a price-to-earnings (P/E) ratio of round 26 occasions and a price-to-book (P/B) ratio of roughly 13 occasions. These valuation metrics counsel that Hyundai’s inventory is priced at a premium, reflecting its place as India’s second-largest carmaker within the PV market, trailing solely Maruti Suzuki.

Regardless of the premium pricing, Hyundai’s progress potential in each the premium SUV and electrical car (EV) segments stays a compelling issue for buyers.

One of many strategies buyers can use to foretell the motion of the inventory value post-IPO is the Elliot wave idea. This idea helps forecast inventory value patterns primarily based on recurring fractal waves.

Market overview

Hyundai Motor is well-positioned to capitalise on the rising demand for premium automobiles in India, notably amongst youthful patrons who’re gravitating towards high-end SUVs. Moreover, the corporate stands to profit from the speedy enlargement of the electrical car (EV) market in India.

Nevertheless, Hyundai faces vital competitors from rivals like Tata Motors, Mahindra & Mahindra, and Kia Motors. This aggressive strain has eroded Hyundai’s market share, which fell from 18% in FY20 to fifteen% by the primary quarter of FY25, whereas opponents have gained floor.

Firm strengths

1. Capability enlargement: Hyundai is growing its manufacturing capability in India from 8.2 lakh items to 10.7 lakh items with the development of a brand new plant in Talegaon, Maharashtra. This capability ramp-up will permit the corporate to satisfy the rising demand for PVs in India.

2. Operational effectivity: The corporate sources 93% of its components regionally close to its Chennai plant, enabling streamlined operations and decrease stock prices. Moreover, Hyundai’s frequent platform structure permits it to provide a number of fashions concurrently, enhancing its manufacturing effectivity.

3. Premiumisation technique: Hyundai has efficiently shifted its focus in direction of premium automobiles. In FY24, 49% of its income got here from automobiles priced above ₹10 lakh and 20% from automobiles priced over ₹15 lakh. This premiumisation technique, notably within the SUV section, has pushed income progress and helped Hyundai keep its aggressive edge.

Firm weaknesses

1. Declining market share: Hyundai’s market share within the PV section has declined resulting from rising competitors. Between FY20 and Q1 FY25, Hyundai’s share fell from practically 18% to fifteen%, whereas opponents like Tata Motors and Mahindra & Mahindra have elevated their market presence. Tata’s market share rose to 13% from 5%, and Mahindra practically doubled its share to 12% throughout this era.

2. Royalty settlement: Hyundai India is required to pay royalty charges to its mother or father firm. This royalty charge will be elevated to five% with out shareholder approval, posing a possible danger to profitability. For instance, a 1% improve within the royalty charge, primarily based on FY24 income, would price Hyundai India ₹700 crore. Such will increase may negatively affect the corporate’s backside line.

Monetary particulars and key ratios

The Hyundai IPO, value ₹27,870 crore, can be provided on the market with out a contemporary subject. Publish-IPO, the corporate’s market capitalisation is predicted to achieve ₹1,59,258 crore, with a promoter holding 82.5%.

Financially, Hyundai has demonstrated sturdy efficiency, with a 21.4% compound annual progress price (CAGR) in income and a 44.5% CAGR in EBIT and revenue after tax (PAT) from FY22 to FY24. The corporate’s ROE and ROCE are additionally spectacular, averaging 27.4% and 29.3% over the past three years.

With the Hyundai Motor India IPO anticipated to be closely subscribed, it is essential to have entry to a share market app that provides real-time updates and seamless buying and selling experiences. Trendy buying and selling apps include options like livestock costs, detailed charts, information updates, and IPO alerts, making them indispensable instruments for any investor.

Find out how to apply for IPO utilizing HDFC Sky’s One-Click on characteristic

The One-Click on IPO characteristic on HDFC Sky enhances the benefit of making use of for IPOs, providing a clean expertise. Right here’s how you should use it for Hyundai’s IPO:

1. Login to HDFC Sky: Entry your account together with your credentials.

2. Go to IPO part: Choose “Indian Shares” underneath your profile and click on “IPO.”

3. Choose Hyundai IPO: Discover Hyundai within the IPO record and click on “Apply Now.”

4. Place your bid: Enter bid particulars and regulate as wanted.

5. Proceed with cost: Choose UPI for cost.

6. Approve the mandate: Use your UPI app to authorise the cost.

7. Affirm your order: Finalise by confirming and putting the order.

HDFC Sky’s One-Click on IPO key options

• One-click comfort: Apply with minimal paperwork in a couple of clicks.

• On the spot updates: Obtain real-time notifications about your software.

• Centralised platform: Handle all of your IPOs seamlessly from one platform.

• Anyplace entry: Apply from wherever through the app or portal.

Hyundai’s IPO presents a superb funding alternative. With HDFC Sky’s One-Click on characteristic, you possibly can simply take part on this main occasion, simplifying the complete course of.