On October 15th 2024, Hyundai Motors’ first public offering will begin.The market eagerly anticipated the company’s plan to sell 14.22 crore promoter shares in order to raise Rs 27870 crore.
As planned, the Hyundai Motor India IPO subscription period began on Tuesday, October 15, and will end on October 17. With a face value of ₹10, the price range is fixed at ₹1865 to ₹1960 per share.
However, there are several reasons to exercise caution in this case:
- The grey market premium has drastically decreased since the bankers raised the IPO’s valuation ask.
- The price range appears to be extremely high at 1865–1969 rs, and it now appears that there is nothing left for investors to consider.
- Additionally, it is an offer for sale, meaning that current shareholders are selling their shares through the IPO and that funds are not entering the business for expansion or growth because there is no new issue.
- Ultimately, it is a solid business with a respectable market share in home areas, but there doesn’t seem to be any room for listing profits if you don’t leave anything for investors.
- In comparison to listed counterparts, the valuations appear costly.
- The asking price is at a P/E of 26.73 if we assign FY25 annualized super earnings to its post-IPO fully diluted paid-up equity capital. Based on FY24 earnings, the P/E is at 26.28X, whereas market leaders like Maruti trade at 27–28X.
- A big IPO like this usually drains a lot of liquidity and usually occurs when the market is at its height, so it is definitely advisable to exercise care.
- In the end, the IPO will still proceed and perhaps receive strong subscriptions, but the bigger question is: Are investors still left with any options?