International brokerages have begun covering Hyundai Motor India (HMIL), the nation’s largest issue by size, ahead of its listing. Qualified Institutional Buyers (QIBs) led the subscription rate at 6.97 times, and the issue proved to be successful, obtaining 2.37 times the overall subscription.
There were 142.2 million shares up for sale in the Rs 27,870 crore comprehensive offer for sale (OFS). Following the problem, promoters’ ownership of the business will drop to 82.5%.
The stock has been bought by international broking Nomura, with a target price of Rs 2,472 a share. An upside of more than 26% is implied by the projected target. Additionally, it thinks that the stock should grow at a high rate due to continuous premiumization.
The firm sees a bright future for the Indian auto industry, which now has 36 automobiles per 1,000 inhabitants. Nomura anticipates that the firm will achieve a volume CAGR of 8% during FY25–27F, driven by 7-8 new models, including facelifts, and that its EBITDA margins will increase from 13.1% in FY24 to 14.1% by FY27F, driven by improved mix, cost reduction, and operating leverage.
With a ‘outperform’ rating and a target price of Rs 2,235—which would indicate gains of more than 14% over the issue price—another broking, Macquarie, has also begun covering the company.
The firm considers that HMIL should trade at a higher price-to-earnings (P/E) multiple than its peers because of its premium positioning and advantageous portfolio composition. Furthermore, it views the company’s medium-term benefits from powertrain introduction and powertrain optionality, including parent capabilities and market share upside risk from new models.
Today, October 22, 2024, the company’s stock is scheduled to have its market debut.
