Hyundai Motor India Limited has recently listed in bourses through its initial public offering (IPO) and plans for significant expansion in India. However, following a lackluster debut on the stock market, potential investors who invested in IPO are at a loss after the stock listed 1.50 percent discount from its issue price and fell further. The stock went up today 5 percent after recent brokerage calls.
IPO Listing & Stock Movement
Hyundai’s IPO, valued at Rs. 27,870 crore, opened for public subscription on October 15 and closed on October 17. The share price was set between Rs. 1,865 and Rs. 1,960. Despite high expectations, the stock’s performance post-listing is lukewarm as it fell around 7 percent on the listing day. The stock became the fifth most valuable company by market capitalisation after listing.
Analysts said due to market volatility and investor sentiment towards the broader automotive sector. The sector has faced challenges due to rising inventory holdups and slow market demand. Today, the stock went up by 5 percent in the day’s trade with stock price touching a high of Rs. 1928.15 from the previous closing price of Rs. 1820.40 apiece.
Brokerage Calls
Following the IPO, various brokerage firms have issued reviews on Hyundai’s stock. Some analysts remain optimistic about the company’s long-term growth potential due to its robust expansion plans and increasing focus on electric vehicles.
Brokerages like Motilal Oswal have given a “buy” recommendation based on Hyundai’s strong brand presence in India and its technological capabilities in futuristic technologies which adapt to domestic requirements with a buy target of Rs. 2,345 apiece, an upside of around 23 percent and Nomura gave a target of Rs. 2,472 apiece with an upside of 30 percent.
Recent Plant in Chennai
The company is already one of India’s largest automobile manufacturing facilities and planning to increase the plant’s size in Chennai by investing around Rs. 1,500 crores.
Financials
Hyundai’s financial performance FY24 ending March, HMIL reported operational revenue of Rs. 69,829 crore which saw an increase from Rs. 60,308 crore in FY23. The profit also rose from Rs. 4,709 crore to Rs. 6,060 crore during the same period.
The company has plans for further expansion with an allocation of Rs. 32,000 crores which is aimed at expanding production, of electric vehicles and regaining market share. This includes investments in new products and platforms that align with consumer preferences.
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Company Overview
Hyundai Motor India Limited is a subsidiary of South Korea’s Hyundai Motor Company and it is operational in India since 1996. It is recognized as one of India’s leading automobile manufacturers with a market share of around 15 percent. The company has ranked second among automobile brands in India.
Hyundai’s strategy includes a significant focus on electric vehicles as it aims to capture a larger share of the increasing EV market in India. The company plans to introduce several battery-powered models over the next few years while enhancing local production capabilities through its Chennai plant.
Conclusion
Despite its weak debut on the stock exchange, Hyundai Motor India’s extensive expansion plans and strategic investments position it as a potentially long-term investment opportunity. Investors should consider looking into the company and understanding the challenges of market dynamics and the company’s approach towards innovation and improving market share in the automotive sector.
As Hyundai continues to strengthen its presence in India through new facilities and product offerings, it remains a key player, and more competition pressure on listed companies to perform.
Written by: Santhosh
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