 "Hyundai Motor India gears up for an IPO, aiming for a valuation that could surpass market leader Maruti Suzuki.")
Hyundai Motor India (HMI) has received approval from Sebi to launch its initial public offering (IPO), which is expected to happen in early November. The IPO, valued at around Rs 25,000 crore, allows Hyundai Motor Company to sell a 17.5 percent stake in its Indian unit. According to Nomura, HMI might achieve a valuation higher than Market leader Maruti Suzuki due to ongoing Market share growth and new car launches. HMI’s stable Market share of 15-17 percent and record domestic sales in 2023 put it in a strong position for future growth, particularly with new electric and hybrid vehicles on the horizon. The IPO aims to enhance HMI’s visibility and provide significant value to its parent company.
Hyundai Motor India (HMI) is gearing up for its upcoming initial public offering (IPO) after receiving approval from the Securities and Exchange Board of India (Sebi). This IPO, anticipated to be worth approximately Rs 25,000 crore, is expected to launch in early November. HMI has set its valuation between Rs 1.5 trillion and Rs 1.7 trillion, which might surpass the Market leader Maruti Suzuki India (MSIL) in terms of valuation multiples, according to brokerage firm Nomura.
HMI has been performing well, posting a net profit of Rs 4,709 crore in FY23 and Rs 4,383 crore in the first nine months of FY24. The company has maintained a Market share of 15-17% in India since 2008, with its latest sales figures reflecting success in compact and mid-size SUVs. Highlights from 2023 show HMI achieving a record domestic sale of 602,000 units.
As part of the IPO, Hyundai Motor Company will sell a 17.5% stake in its Indian unit, primarily aimed at raising funds and enhancing HMI’s visibility and liquidity in the Indian Market. Nomura predicts that HMI’s sales could grow due to upcoming car launches, including electric and hybrid models, pointing to a bright future for the automaker.
Hyundai’s strategic move into the stock Market not only aims to benefit its Indian operations but also has the potential to create value for its parent company. Investors are watching closely, as HMC’s CEO has indicated plans to announce how the IPO proceeds will be used after the offering.
Stay tuned for more updates as Hyundai Motor India prepares for its IPO and the implications it may have on both the Indian automotive Market and its global parent company.
What does Nomura say about Hyundai’s valuation?
Nomura believes that Hyundai Motor should have a higher value compared to Maruti Suzuki.
Why does Nomura think Hyundai deserves a premium?
Nomura points to Hyundai’s better technology, design, and Market performance as reasons for the premium.
How does Hyundai compare to Maruti Suzuki in terms of sales?
Hyundai generally has strong sales and a good Market share, often competing closely with Maruti Suzuki.
What are some strengths of Hyundai that Nomura mentions?
Nomura highlights Hyundai’s advanced features, quality cars, and strong brand reputation as its strengths.
Is this view widely accepted in the Market?
While some investors agree with Nomura, opinions vary, and others may favor Maruti Suzuki for different reasons.
