INSUBCONTINENT EXCLUSIVE:
Hyundai(Photo: Shutterstock)3 min read Last Updated : Oct 14 2024 | 10:51 PM IST
Hyundai Motor India (HMIL) raised Rs 8,315 crore from
carmaker Hyundai Motor Company (HMC) allotted 42.4 million shares to 225 funds at Rs 1,960 apiece, the higher end of its price band.Click
New World Fund, and Fidelity
The allotment included 21 domestic mutual funds (MFs), such as ICICI Prudential MF, SBI MF, and HDFC MF, which applied through 83
payments firm One97 Communications (Paytm), which launched a Rs 18,300 crore IPO in 2021
Since Paytm was a loss-making company, it had to reserve a higher portion of shares for qualified institutional buyers, allowing for a
larger anchor allotment.
Anchor allotments are made to marquee investors a day before the IPO to instil confidence and provide cues to
gauging the depth and attractiveness of the domestic equity markets.
Through the IPO, Seoul-headquartered HMC is divesting its 17.5 per
cent stake and will raise Rs 27,870 crore at the top end
The IPO does not include any fresh fundraising.
The price range for the issue is Rs 1,865 to Rs 1,960 per share, setting a valuation of
times its 2023-24 (FY24) earnings, which is about 10 per cent lower than the market leader, Maruti Suzuki India (MSIL).
Some analysts
believe that HMIL can command a similar or higher premium to MSIL, given its superior margins and returns profile, even though its volumes,
market share, and distribution reach are about a third of MSIL
outlook for Hyundai remains strong due to its strong parentage, leveraging of parent technology, and research and development capabilities,
as well as a solid balance sheet
However, at the upper price band, Hyundai is available at a rich valuation of 26 times its FY24 earnings per share, leaving little on the
considering the large issue size and competitive landscape
The brokerage believes the company is poised to deliver healthy double-digit portfolio returns over the medium to long term.First Published:
