 "Planning to apply for Hyundai Motor India IPO? Consider these risks first")
One of India's largest and most awaited initial public offerings (IPO) — Hyundai Motor India IPO — is slated to open for subscription on Tuesday, October 15, and will conclude on Thursday, October 17, 2024. Amid the buzz, brokerage firm Mirae Asset has highlighted some risks that investors should consider before subscribing to the IPO.
Hyundai Motor India's IPO is entirely an offer for sale (OFS) of 142,194,700 shares, aggregating to a total of Rs 27,870.16 crore. Its price band is fixed at Rs 1,865 to Rs 1,960 per share. The minimum lot size for subscribing to the Hyundai Motor India IPO is 7 shares. Accordingly, the minimum amount of investment required by retail investors is Rs 13,720.
The book-running lead managers of the Hyundai Motor IPO include Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities & Capital Markets, J P Morgan India, and Morgan Stanley India. Meanwhile, Kfin Technologies is the registrar for the issue.
Here is a list of key risks highlighted by Mirae Asset for the Hyundai Motor IPO:
- Hyundai Motor Company's two group companies, Kia Corporation and Kia India, may face a conflict of interest as they both operate in similar lines of business.
- Any increase in the prices of parts and materials could adversely affect business and results of operations.
- Hyundai Motor India's dependency on selected suppliers for parts and materials could be a risk, as any interruption in the availability of these could adversely impact operations.
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- The automobile company's operations could also be affected if there is any reduction in demand for or disruption in the manufacturing of Sports Utility Vehicles (SUVs) or other passenger vehicle models. Hyundai Motor India substantially depends on the sales of SUV models in India.
- Hyundai Motor India's long-term competitiveness depends on the evolution of the electric vehicle (EV) market and the adoption of alternative fuels in India. Failure to recognize these market trends and meet customer demands for EVs could take a toll on the company's operations.
About Hyundai Motor India (HMIL)
Hyundai Motor India is a wholly owned subsidiary of Hyundai Motor Company, the third-largest auto OEM (original equipment manufacturer) in the world. Hyundai Motor India was formed on May 6, 1996, by Hyundai Motor Company.
It has been the second-largest auto OEM in the Indian passenger vehicle market since FY09. Hyundai Motor India has a diverse portfolio of 13 passenger vehicle models across segments like sedans, hatchbacks, SUVs, and EVs.