Hyundai Motor IPO: While Hyundai’s IPO is undoubtedly generating excitement, experts are saying this is more of a marathon than a sprint.
Hyundai Motor India’s much-anticipated initial public offering (IPO) has kicked off today, October 15, and is already the talk of the town. Priced between Rs 1,865 and Rs 1,960 per share, this IPO is set to raise a whopping Rs 27,856 crore, making it the largest public offering in India’s history. It’s also the first time since 2003 that an automaker has gone public in the country—Maruti Suzuki being the last.
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But as the buzz intensifies, many brokerages are urging investors to not get too carried away by short-term excitement. They’re advocating for a more cautious, long-term approach, focusing on Hyundai’s growth potential rather than aiming for quick listing gains.
BEYOND LISTING GAINS
Brokerages like ICICI Direct and Jefferies are bullish on Hyundai’s IPO, given the company’s solid market position and strong financials. But here’s the catch—they recommend looking beyond the initial listing performance. The excitement is real, but they say the real value lies in what Hyundai is gearing up for in the future.
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Currently, the grey market premium (GMP) for Hyundai’s shares sits at Rs 40, offering a modest 2.04% premium over the issue price. This is a notable drop from the Rs 570 GMP seen just two weeks ago. While GMP gives some insight into market sentiment, it’s not always the best indicator of long-term success.
Hyundai isn’t just any carmaker; it holds a 14.6% market share in India and is running its Chennai plants at over 90% capacity. With a strong portfolio of 13 models, including best-selling SUVs like the Creta and Venue, Hyundai is well-positioned to benefit from the projected growth in the domestic passenger vehicle market.
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But that’s not all. The company’s future plans have got analysts even more excited. Motilal Oswal, for instance, is advising long-term investors to pay attention to Hyundai’s plans to expand its electric vehicle (EV) portfolio. As the world shifts towards sustainable transportation, Hyundai’s strategic focus on EVs could significantly boost its profitability in the years to come.
Moreover, brokerage firm Nomura has also flagged Hyundai’s upcoming ventures in new energy as a key driver of future growth. By March 2025, the company is expected to roll out new energy operations, which could further elevate its market position. And there’s more—Hyundai might even list its subsidiaries, such as its Jio or Retail businesses, in the next 12-15 months, giving investors even more to look forward to.
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LONG-TERM PLAY
Gaurav Garg, a Research Analyst at Lemonn Markets Desk, highlighted Hyundai’s operational strength: “Hyundai Motor India’s local sourcing strategy and robust revenue growth of 21.4% CAGR from FY22-24 make it a formidable player. SUVs account for 67% of its 2024 revenue, making Hyundai a leader in this segment.”
Garg also pointed out Hyundai’s consistent focus on adapting to consumer trends, particularly its push into high-value vehicles like SUVs. This, he believes, makes the IPO an attractive long-term investment—even if the immediate listing gains are modest.
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So, what’s the bottom line? While Hyundai’s IPO is undoubtedly generating excitement, experts are saying this is more of a marathon than a sprint. The company’s long-term prospects—its push into EVs, new energy ventures, and potential subsidiary listings—make it a compelling investment for those with a patient outlook.
As the IPO unfolds, keep an eye on Hyundai’s broader strategy and market performance. The short-term listing gains might not be fireworks, but the long-term growth story looks promising.
