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Shares of Hyundai Motor India’s (HMIL) will be listed at the bourses on Tuesday. The ₹27,870-crore IPO, the largest to date in Indian IPO history, was struggling but sailed through on the final day with help from qualified institutional buyers. The company has fixed the IPO price as ₹1,960 at the upper end of the price band ₹,1865-1,960.
Macquarie has initiated coverage on Hyundai Motor India with Outperform rating with a target price of ₹2,235, implying 14 per cent upside to issue price.
The IPO was subscribed 2.37 times overall. The QIB portion was subscribed nearly seven times, with bids for 19.72 crore shares against the 2.82 crore shares on offer.
The quota for employees was subscribed 1.74 times. The issue received a lukewarm response from high net worth and retail investors, with their quotas getting subscribed 0.6 times and 0.5 times respectively.
HMIL had raised ₹8,315 crore from anchor investors from 225 funds at a price of ₹1,960 each a few days ago. The issue is an offer-for-sale that will see its promoters and promoter group selling 17.5 per cent stake. HMIL will not receive any proceeds from the offer.
Master Capital Services Ltd, said the company’s shares at pre-listing are trading at a grey market premium of ₹75 which is 3.8 per cent higher than its original price band. Meaning that, the shares might list at ₹2,035.
“Hyundai Motor India, is the second-largest automobile manufacturer in India, holding a 15 per cent market share. Despite some concerns regarding short-term listing gains due to subdued grey market premium, the company offers steady growth prospects amid industry tailwinds, robust financials and healthy SUV product demand. Hyundai’s leadership in India’s passenger vehicle market, along with its strategic focus on electric vehicles makes a compelling investment for long-term investors,” said Macquarie.
“We believe HMIL deserves to trade at a premium PE multiple versus peers due to its favourable portfolio mix and premium positioning,” it said adding that Powertrain optionality, including parent capabilities and market share upside risk from new models/powertrain launch, are medium-term positives.
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