The market regulator Securities and Exchanges Board of India has approved Hyundai Motor India's public offering, paving the way for the launch of India's largest IPO in history, with a goal of raising $3 billion. The company's IPO is expected to start in October, with a valuation of between $18 billion and $20 billion.
While more specifics of the IPO, such as pricing and schedule, have still to be announced, brokerage company Nomura believes Hyundai Motor India merits a valuation premium as opposed to its main competition in the Indian market--Maruti Suzuki India. The brokerage house's attitude is based on Maruti Suzuki India's continued market share fall.
Maruti Suzuki is India's largest carmaker in terms of domestic wholesale unit sales (according to SIAM statistics), with a 41 percent market share and a market capitalization of $48 billion, commanding a 12-month forward PE of 22.6 times expected FY25 profits. However, the firm is feeling the heat of increased competition and seeing a decrease in market share, which is seen positively by Hyundai Motor India, the country's second-largest carmaker.
Hyundai Motor, India's second-largest carmaker, has had a constant market share of 15-17 percent since 2008. In 2023, the business reached its highest-ever domestic sales of 6,02,000 units, representing a 9 percent year-on-year increase. Nomura attributed this outstanding result to the popularity of its compact and mid-size SUVs, notably the Creta, Exter, and Venue models.
Looking ahead, Nomura predicts increased growth momentum for Hyundai Motor India in 2025-26, led by the introduction of new models such as the Creta EV in 2025 and a petrol-hybrid SUV to be built at the newly purchased General Motors facility in Talegaon by 2026.
