Hyundai Motors IPO: An Upcoming Investment Opportunity

Hyundai Motors India Limited (HMIL) is poised to make a major move in the Indian financial market with its much-anticipated Initial Public Offering (IPO). Expected to be one of the biggest IPOs in India's history, this offering has captured the attention of investors and financial experts alike. As the automotive giant prepares to go public, retail and institutional investors are keenly exploring the potential of this investment.

Here’s a closer look at the Hyundai IPO, with HDFC Sky’s ‘One-Click IPO’ providing a streamlined investment solution.

Whether you're experienced in the share market or just starting out, commodities trading could be a part of your strategy for investing in Hyundai's IPO.

Why is Hyundai Motors Going Public?

Hyundai Motors, a global leader in the automotive industry, has chosen to go public in India for multiple reasons. One of the primary factors behind this decision is the company’s desire to unlock higher valuations and broaden its investor base.

Hyundai is targeting the Indian market as a hub for growth, especially with its increasing share in the domestic automotive sector. By opting for an IPO, Hyundai aims to capitalise on the significant market potential in India and address what is known as the "Korea discount," where South Korean firms are often valued lower than their international counterparts.

To participate in the Hyundai Motors IPO, you will first need a Demat account. A Demat account, short for "dematerialised account," allows investors to hold and trade shares in an electronic format, ensuring a seamless experience. Today, demat account opening online is a straightforward process

Key Details of the Hyundai Motors IPO

Here is an overview of the important aspects of the Hyundai Motors IPO:

Once your Demat account is ready, the next step is to apply for the Hyundai Motors IPO. The most convenient way to do this is through a share market trading app. The user-friendly interface of these apps makes it easy for beginners to navigate the IPO process, from applying to tracking the allotment status.

IPO Reservation

In the Hyundai Motor IPO, the allocation of shares is divided among different investor categories based on regulatory requirements. Each category is allocated a certain percentage of the net issue, ensuring a fair distribution among various types of investors. The following are the reserved shares for each category:

• Qualified Institutional Buyers (QIB): Not more than 50.00% of the net issue is reserved for QIBs. This category includes entities like mutual funds, insurance companies, and foreign institutional investors.

• Retail Individual Investors (RII): Not less than 35.00% of the net issue is reserved for retail investors. This category includes individual investors looking to invest small amounts in the IPO.

• Non-Institutional Investors (NII) or High Net-Worth Individuals (HNI): Not less than 15.00% of the net issue is reserved for NIIs or HNIs, who typically invest larger amounts in IPOs.

Market Position and Financial Health

As the second-largest passenger vehicle manufacturer in India, Hyundai Motors India has a market share of 14.9% as of FY24. The company’s portfolio, particularly in the SUV segment, has been a driving force behind its growth. Successful models like the Creta and Venue have struck a chord with Indian consumers, contributing significantly to Hyundai's standing in the market.

In FY23, Hyundai Motors India recorded revenue of ₹63,394 crores, with profits surging to ₹4,709 crores from ₹2,862 crores in FY22. The company’s investments in the Indian market, such as its ₹7,000 crore commitment to modernising its Talegaon plant, will further boost production capacity to meet growing demand.

Hyundai Motors’ Competitive Landscape

Hyundai’s public offering is set to impact the broader Indian automotive sector, especially its main rivals, Maruti Suzuki and Tata Motors. The following are some key points about the competitive landscape:

Impact on Tata Motors

• Tata Motors has gained popularity with its models like Nexon and Harrier, but Hyundai’s IPO could challenge its position.

• With a stronger capital base after the IPO, Hyundai may invest more in electric vehicles (EVs), competing with Tata, a pioneer in India's EV space.

Impact on Maruti Suzuki

• Maruti Suzuki’s vast network and strong customer loyalty help it maintain leadership in the Indian automotive market.

• However, Hyundai’s growing SUV portfolio might push Maruti Suzuki to enhance its offerings in this segment.

As Hyundai Motors continues to expand its footprint in India, both Tata Motors and Maruti Suzuki will face increased competition, prompting them to innovate and strengthen their market positions.

Investment Strategies for Hyundai IPO

While investing directly in Hyundai Motors' IPO may seem attractive, investors can also explore indirect investment routes. One such method is investing in mutual funds SIP app (Systematic Investment Plan).

Mutual funds provide exposure to a diversified portfolio, which might include shares of Hyundai Motors post-IPO. SIPs, in particular, allow investors to invest small amounts periodically, which can help spread risks and ensure consistent market participation.

Investing in mutual funds that focus on large-cap companies or automotive sector stocks can be a great way to gain exposure to Hyundai while minimising the risk of direct stock market investment.

How to apply for IPO using HDFC Sky's One-Click feature

The One-Click IPO feature on HDFC Sky revolutionises the IPO application process, making it simple and efficient. Here’s how you can apply for the Hyundai IPO:

1. Login to HDFC Sky: Start by logging into your account with your credentials.

2. Navigate to the IPO section: Go to "Indian Stocks" in your profile, then select "IPO."

3. Select the Hyundai IPO: Find Hyundai in the IPO list and click "Apply Now."

4. Enter your bid: Provide your bid details and adjust your application as necessary.

5. Payment: Choose UPI as your payment method.

6. Approve the mandate: Use your UPI or banking app to authorise the payment.

7. Confirm and place your order: Finalise your application by confirming and placing your order.

Key benefits of HDFC Sky’s One-Click IPO include:

• Effortless application: Submit your IPO application with a single click, reducing paperwork and errors.

• Instant notifications: Receive real-time updates on your application status and refunds.

• Centralised management: Manage all your IPO investments seamlessly from one platform.

• Accessible from anywhere: Apply using the HDFC Sky mobile app or online portal for convenience.

The Hyundai IPO is an excellent investment opportunity, offering a blend of growth and stability. HDFC Sky’s One-Click IPO feature simplifies the investment process, making it accessible and efficient. Don’t miss this chance to engage in this major market event.

Disclaimer: This story is not part of Outlook Money's editorial content and was not created by Outlook Money journalists.