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Business News/ Markets / Ipo/  Hyundai IPO: How will the proposed largest IPO in India impact rival Maruti Suzuki?
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Hyundai IPO: How will the proposed largest IPO in India impact rival Maruti Suzuki?

Hyundai IPO would be worth $3 billion, the largest in India. The company has appointed investment bankers JPMorgan and Citi to advise it on the IPO, Reuters reported.

Hyundai Motor is likely to file draft IPO papers in India by May-June for an approval, while the issue could be launched by October-November 2024, reports said. (Photo: Bloomberg)Premium
Hyundai Motor is likely to file draft IPO papers in India by May-June for an approval, while the issue could be launched by October-November 2024, reports said. (Photo: Bloomberg)

Hyundai IPO: South Korean automaker Hyundai Motor Company is planning to list its Indian unit and is likely to file regulatory papers in India by May to June for an approval, reports said.

Hyundai is the second-biggest automaker in India with a 15% market share. The company is in the initial stages of considering an initial public offering (IPO) in India that would value its local operation at up to $30 billion. The IPO could be India's largest, Reuters reported.

Accelerating listing plans in the world’s third-largest auto market, Hyundai has also appointed investment bankers to advise on its at least $3 billion India IPO.

Let us check the key things we know so far about the Hyundai IPO and its implications in the Indian market, especially on its rival Maruti Suzuki.

About Hyundai IPO

Hyundai Motor is likely to file draft IPO papers in India by May-June for an approval, while the issue could be launched by October-November 2024, reports said.

Hyundai IPO would be worth $3 billion, the largest in India. The company has appointed investment bankers JPMorgan and Citi to advise it on the IPO, Reuters reported.

Also Read: Auto Q3 Result Review: Expect positive momentum to sustain, says Nuvama; picks Hero Moto, M&M, Minda

The fundraising by Hyundai would put the valuation of its Indian operation at more than half its market capitalisation of around $47 billion in Seoul, the report added.

Some domestic Indian investment banks are also likely to be appointed for the IPO in coming months.

Hyundai IPO impact on Maruti Suzuki:

Hyundai India sold 6.02 lakh vehicles in 2023, its highest-ever annual domestic sales in India, registering a growth of 9% over the previous year. The company’s export rose by 10% to 1.63 lakh units compared to 1.48 lakh units a year ago.

Meanwhile, during the past 12-18 months, India’s largest passenger car manufacturer Maruti Suzuki reported around 40 bps market-share gains YoY in FY24YTD, led by healthy response to its SUV launches (particularly the new Brezza, Grand Vitara and Fronx).

Hyundai Motors India is the second largest passenger vehicle (PV) OEM with 14.9% FY24YTD market share, at $22- 28 billion valuation, analysts said.

Such valuation offers up to around upside risk to Maruti Suzuki shares based on various scenarios for valuations and discounts (at par or at 20% discount to Hyundai). 

“We believe Maruti Suzuki India could trade at similar valuations as Hyundai, amid Suzuki’s large India dependence and Toyota’s support/alliance, offset by Hyundai’s strong global standing and premium positioning," Emkay Global Financial Services said.

Potential small-car recovery and Maruti Suzuki’s E-SUV launch in October 2024 (industry’s firstborn EV launch) are added upside risks, it added. 

However, post the recent run-up in Maruti Suzuki share price, the brokerage assigned a ‘Reduce’ rating versus ‘Add’ earlier, with an unchanged target price of 10,700 per share.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 21 Feb 2024, 02:05 PM IST
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