Hyundai IPO: What Smart Investors Need to Know

Hyundai Motor India Limited (HMIL), part of the globally recognised Hyundai Motor Group, is gearing up for its initial public offering (IPO). Founded in May 1996, the company has established itself as a significant player in the Indian automobile market, known for its reliable and innovative vehicles.

With plans to raise substantial capital through this IPO, it presents an attractive opportunity for investors. Understanding how IPO allotment works can help potential buyers navigate this process effectively.

Here’s a complete guide to the Hyundai IPO, featuring HDFC Sky’s efficient ‘One-Click IPO’ investment solution.

Overview of Hyundai Motor India

Hyundai Motor India is a prominent figure in the Indian automobile industry. Its diverse portfolio includes sedans, hatchbacks, SUVs, and electric vehicles (EVs). The company operates an advanced manufacturing plant in Chennai, producing vehicles for both domestic and international markets. By March 31, 2024, Hyundai had sold nearly 12 million passenger vehicles, showcasing its widespread appeal among Indian consumers.

Hyundai Motor India IPO Details

Hyundai's IPO aims to raise ₹27,870.16 crores through the sale of 14.22 crore shares. Notably, this is a complete offer for sale, meaning that the company itself will not receive any proceeds. Instead, the funds raised will benefit the Promoter Selling Shareholder. This structure offers existing shareholders an opportunity to divest their holdings while the company focuses on enhancing its operational capabilities.

Investors keen on participating in the Hyundai IPO can do so by ensuring they have a demat account opening online. This step is crucial as a demat account facilitates the storage of shares in an electronic format, simplifying the trading process

Key Dates to Remember:

• IPO Open Date: October 15, 2024
• IPO Close Date: October 17, 2024
• Basis of Allotment: October 18, 2024
• Credit of Shares to Demat: October 21, 2024
• Listing Date: October 22, 2024

Many platforms now offer a demat account app that allows for seamless transactions and easy monitoring of investments.

Pricing and Lot Size

The IPO features a price band of ₹1,865 to ₹1,960 per share, with a minimum lot size of 7 shares. This pricing strategy aligns with the company's objective of maximizing investor interest and participation.

Financial Health and Performance

Investors should assess Hyundai's financial performance to gauge its potential for growth:

• Assets

Hyundai's total assets as of June 30, 2024, were ₹25,370.24 crores, reflecting a slight decline from ₹26,349.25 crores reported in March 2024. The peak asset value recorded was ₹34,573.34 crores in March 2023, indicating the company's fluctuating asset base over the years.

• Revenue

Hyundai has demonstrated substantial revenue growth. For the quarter ending June 30, 2024, the revenue reached ₹17,567.98 crores. The total revenue for the financial year ending March 31, 2024, was ₹71,302.33 crores, a rise from ₹61,436.64 crores in FY 2023, showcasing the company's robust performance.

• Profit After Tax (PAT)

The profit after tax (PAT) for Hyundai also exhibits a positive trend. As of June 30, 2024, PAT stood at ₹1,489.65 crores, with FY 2024 PAT recorded at ₹6,060.04 crores, a significant increase from ₹4,709.25 crores in FY 2023.

Investment Risks and Opportunities

When considering investing in the Hyundai IPO, it's essential to weigh the potential risks and opportunities:

Potential Risks

1. Fluctuations in Raw Material Costs

Fluctuations in raw material costs pose a significant challenge for Hyundai, as changes in these costs can directly impact profit margins and overall financial health. When prices rise, the company's ability to maintain competitive pricing and profitability may be compromised, potentially affecting its bottom line.

2. Increased Competition in the EV Market

Additionally, the increased competition in the EV market presents another hurdle. As the demand for electric vehicles grows, Hyundai encounters fierce competition from both established automakers and new entrants aiming to capture market share. This competitive landscape requires continuous innovation and strategic investments to ensure that Hyundai remains a key player in the rapidly evolving automotive industry. Adapting to these challenges will be crucial for sustaining growth and profitability in the future.

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Opportunities

1. Strong Brand Recognition

Hyundai boasts strong brand recognition, which plays a crucial role in its success. This loyalty translates into consistent sales and a robust market share, as consumers often prefer well-established names for their vehicle purchases. Hyundai's reputation for producing reliable and feature-rich vehicles strengthens this loyalty, making it a top choice among buyers.

2. Expansion into the EV Market

Additionally, Hyundai is strategically expanding into the EV market. As demand for electric vehicles rises, the company is poised to leverage its expertise and innovative capabilities to meet consumer needs for sustainable transportation. By investing in electric vehicle technology and infrastructure, Hyundai is not just adapting to market trends but is also positioning itself as a leader in the future of mobility. This focus on sustainability will likely enhance its brand appeal, ensuring continued growth in a rapidly evolving automotive landscape.

How to Apply for Hyundai IPO using HDFC Sky’s One-Click-IPO

The One-Click IPO feature on HDFC Sky enhances the ease of applying for IPOs, offering a smooth experience. Here’s how you can use it for Hyundai’s IPO:

1. Login to HDFC Sky: Access your account with your credentials.
2. Go to IPO section: Select "Indian Stocks" under your profile and click "IPO."
3. Select Hyundai IPO: Find Hyundai in the IPO list and click "Apply Now."
4. Place your bid: Enter bid details and adjust as needed.
5. Proceed with payment: Select UPI for payment.
6. Approve the mandate: Use your UPI app to authorise the payment.
7. Confirm your order: Finalise by confirming and placing the order.

HDFC Sky’s One-Click IPO key features:

• One-click convenience: Apply with minimal paperwork in a few clicks.
• Instant updates: Receive real-time notifications about your application.
• Centralised platform: Manage all your IPOs seamlessly from one platform.
• Anywhere access: Apply from anywhere via the app or portal.

Hyundai’s IPO presents an excellent investment opportunity. With HDFC Sky’s One-Click feature, you can easily participate in this major event, simplifying the entire process.

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