"We think HMI deserves a valuation premium vs. MSIL, considering MSIL’s ongoing market share decline," Nomura analyst Angela Hong said in a note.
In its draft red herring prospectus (DRHP), Hyundai has set the valuation between USD 18-20 billion while Maruti Suzuki, India's largest car seller with a 41% market share, was valued at USD 48 billion. Maruti shares rallied another 3% during the day.
Hyundai IPO will consist entirely of an offer-for-sale (OFS) of up to 142.2 million shares, representing a 17.5% stake, by its South Korean parent, Hyundai Motor Co.
As the second-largest automaker in India, HMI’s market share has been stable at 15-17% since 2008. The company recorded the highest-ever domestic sales of 602,000 units in 2023, a 9% growth YoY. The strong performance was driven by compact and mid-size SUVs, particularly Creta, Exter and Venue models.
"Its YTD August wholesales increased by 2%, slightly underperforming the industry sales +6% y-y, while we expect the growth to reaccelerate into 2025-26, thanks to the launch of new models including Creta EV in 2025 and petrol-HEV SUV(Ni1i) to be produced in the newly-acquired GM’s (GM US, Reduce) Galegaon plant in 2026. In India, the penetration of BEV and HEV is limited at 2% and 3% of new car sales, respectively, as of YTD August 2024; yet, the demand for xEV will likely grow faster," Nomura said.
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