Forward of the anticipated launch of INR 25,000 crore Hyundai Motor India IPO, India’s largest public concern ever, within the subsequent 1-2 months, international agency Nomura mentioned the Korean firm deserves a better valuation premium than home rival Maruti Suzuki India.
“We expect HMI deserves a valuation premium vs. MSIL, contemplating MSIL’s ongoing market share decline,” Nomura analyst Angela Hong mentioned in a word.
In its draft crimson herring prospectus (DRHP), Hyundai has set the valuation between USD 18-20 billion whereas Maruti Suzuki, India’s largest automotive vendor with a 41% market share, was valued at USD 48 billion. Maruti shares rallied one other 3% through the day.
Hyundai IPO will consist solely of an offer-for-sale (OFS) of as much as 142.2 million shares, representing a 17.5% stake, by its South Korean mum or dad, Hyundai Motor Co.
Because the second-largest automaker in India, HMI’s market share has been steady at 15-17% since 2008. The corporate recorded the highest-ever home gross sales of 602,000 items in 2023, a 9% development YoY. The sturdy efficiency was pushed by compact and mid-size SUVs, significantly Creta, Exter and Venue fashions.
“Its YTD August wholesales elevated by 2%, barely underperforming the business gross sales +6% y-y, whereas we anticipate the expansion to reaccelerate into 2025-26, due to the launch of latest fashions together with Creta EV in 2025 and petrol-HEV SUV(Ni1i) to be produced within the newly-acquired GM’s (GM US, Scale back) Galegaon plant in 2026. In India, the penetration of BEV and HEV is proscribed at 2% and three% of latest automotive gross sales, respectively, as of YTD August 2024; but, the demand for xEV will possible develop sooner,” Nomura mentioned.