MUMBAI: Shares of Hyundai Motor India Ltd made (HMIL) a muted debut on the stock exchanges on Tuesday, October 22 as they listed at Rs 1,934 on NSE, a discount of 1.3% to the issue price of Rs 1,960. On the BSE, the shares were listed at Rs 1931, down 1.5%. Following the listing, the shares fell sharply to hit a low of Rs 1,846. At 11.25, it was trading at about Rs 1,880 a piece, down 4%.
Most analysts were expecting the stock to hit the bourses with flat to modest listing gain after the recently concluded initial public offering (IPO) received a lukewarm response from retail investors and non-institutional investors (NIIs). The Rs 27,870 crore IPO of HMIL, the largest in India’s capital market history, was subscribed 2.37 times.
“We initiate coverage on Hyundai Motor India (HMIL) with REDUCE (TP of Rs1,750, at 23x core Sep-26E PER, similar to MSIL) amid a lackluster 5% earning per share (EPS) CAGR over FY24-27E. HMIL has established a strong franchise in India; however, lack of major launches (key growth driver historically in PVs) over the next 12-18M, muted 5% capacity CAGR, higher royalty, and lower treasury income are likely to restrict EPS growth,” said brokerage firm Emkay Global in a note.
It added, “While MSIL (REDUCE) also faces similar near-term growth challenges, we prefer it over HMIL given its catch-up on operational and financial metrics (even on lower SUV mix) with a much diversified product and powertrain mix and a higher growth optionality (potential small-car recovery, aggressive 8% capacity CAGR, 7-seater SUV launch in H2FY26E, and 10 new models by 2030) driving a superior 6%/10% revenue/EPS CAGR over FY24-27E.”
Shivani Nyati, Head of Wealth at Swastika Investmart said that despite the discounted listing, Hyundai Motor India's strong fundamentals, being the second-largest passenger vehicle manufacturer in India and its strategic focus on the SUV segment, continue to support its long-term growth prospects. Investors who entered with a long-term perspective may consider holding the stock, as future performance will likely be driven by the company’s competitive market position and product innovations,” added Nyati.
Global brokerage firm Macquarie has initiated coverage on Hyundai Motor with an "Outperform" rating and gave a target price of Rs 2,235. Macquarie feels that Hyundai is a strong player in premium passenger vehicle growth and believes it should trade at a higher PE multiple compared to its peers.
Nomura also has given a buy rating and a target price of Rs 2,472. The brokerage added that HMIL is riding on style and technology and its ongoing premiumization should drive high-quality growth.