Hyundai IPO: What You Need to Know Before Investing
he Hyundai Motor India IPO is generating a lot of buzz as it prepares to open for subscription from October 15 to October 17, 2024. Here are some key points to consider if you’re thinking about investing:
IPO Details
- Price Band: ₹1,865 to ₹1,960 per share.
- Issue Size: ₹27,870.16 crore, making it the largest IPO in India’s history.
- Listing Date: Expected on October 22, 2024.
Pros
- Market Position: Hyundai Motor India is the second-largest car manufacturer and the largest exporter of passenger vehicles in India.
- Growth Plans: The company plans to invest ₹32,000 crore over the next 8-10 years to expand its operations and develop an EV ecosystem.
- Strong Financials: Hyundai has a robust financial track record, which can be appealing to investors looking for stability.
Cons
- High Valuation: The IPO is priced at a premium, which might be a concern for some investors.
- Market Risks: The auto sector has been experiencing a slowdown, which could impact Hyundai’s performance.
- Dependence on Parent Company: Hyundai Motor India relies heavily on its parent company for technology and operations, which could pose risks.
Should You Buy?
- For Long-Term Investors: If you believe in Hyundai’s growth strategy and the potential of the Indian auto market, this IPO could be a good addition to your portfolio.
- For Short-Term Investors: Given the high valuation and market risks, it might be wise to proceed with caution and consider the potential for short-term volatility.
Why Hyundai’s IPO Matters
Hyundai’s decision to go public presents a unique opportunity for both retail and institutional investors. Here are some key reasons why this IPO is generating buzz:
- Strategic Shift Towards EVs: Hyundai has committed to investing billions in the development of electric and hydrogen-powered vehicles, aligning itself with global trends in reducing carbon emissions. The IPO could provide the company with the necessary capital to accelerate its EV ambitions and become a major competitor to industry giants like Tesla and Toyota.
- Strong Financial Performance: Hyundai has consistently posted solid financial results, benefiting from a strong global demand for vehicles, especially in regions like the U.S. and Europe. The company’s well-established presence in traditional combustion-engine vehicles, alongside its growing electric vehicle lineup, makes it an appealing investment option for those looking for exposure to both conventional and new-age mobility.
- Rising Demand for Electric Vehicles: The global demand for EVs is expected to skyrocket in the coming decades. Hyundai, with its EV sub-brand IONIQ, has already launched models like the IONIQ 5 and IONIQ 6, which have been well received. The IPO could position Hyundai to be a key player in this rapidly growing sector.
Author’s View : My view for myself – it may go flop.
