Hyundai Motor India Becomes 5th Most Valuable Automaker Following Muted IPO & Listing; Check

Hyundai Motor India Ltd has made a mark on the Indian automotive industry by becoming the fifth most valuable automaker in the country, boasting a market capitalization of over Rs 1.59 lakh crore following its recent listing. Despite the company's achievement of securing a spot among India's top 60 most valuable companies, its stock saw a somewhat lukewarm reception, listing 1.3% below its issue price of Rs 1,960 per share.

In the hierarchy of India's auto giants, Maruti Suzuki India Ltd remains the undisputed leader, holding the top position with a market cap of Rs 3.83 lakh crore. It is followed closely by Mahindra & Mahindra Ltd (M&M) at Rs 3.73 lakh crore, Tata Motors at Rs 3.32 lakh crore, and Bajaj Auto at Rs 2.93 lakh crore. Hyundai Motor India, with its market capitalization of Rs 1.59 lakh crore, joins this elite group, surpassing several well-established companies, including Divi's Laboratories, Power Finance Corporation, Tata Power, GAIL India, BPCL, and Ambuja Cements.

Other key players in the Indian auto industry, such as Eicher Motors Ltd (Rs 1.31 lakh crore) and TVS Motor Co Ltd (Rs 1.30 lakh crore), trail Hyundai in terms of valuation.

While Hyundai Motor India's stock has solidified its position among the top automakers, its debut on the stock exchange was less impressive than expected. The stock was listed at Rs 1,934 per share on October 22, 2024, at a discount of 1.3% from its issue price of Rs 1,960 per share. The subdued listing was largely in line with the market's cautious expectations, as the grey market premium (GMP) prior to the listing stood at a modest Rs 67, or just 3.42%, indicating limited appetite for listing gains.

As the trading session progressed, Hyundai's stock faced further pressure, with the price declining to Rs 1,827 per share by 2:20 pm on the National Stock Exchange (NSE), reflecting a nearly 7% drop from the issue price. Analysts pointed to the company's fully priced valuation as a key reason for the stock's muted performance.

Despite the challenging market debut, analysts remain optimistic about Hyundai Motor India's long-term growth potential. Leading brokerage firm Macquarie has initiated coverage on the stock with an 'outperform' rating. Macquarie set a target price of Rs 2,235 per share, representing a potential upside of 14% from the upper band of the issue price.

Macquarie's bullish stance is driven by Hyundai's diverse portfolio mix, including its strong positioning in the premium segment, and the company's flexibility in powertrain offerings, including electric and hybrid vehicles.

As the second-largest passenger vehicle manufacturer in India, Hyundai Motor India has a robust market presence, particularly in the high-demand SUV segment. While the initial listing performance may have disappointed some short-term investors, analysts believe that Hyundai Motor India's stock could be a promising pick for long-term investors.

Although Hyundai Motor India's stock faced a muted listing on the exchange, its market capitalization milestone highlights its strong standing in the Indian automotive industry. Investors who focus on long-term growth prospects, rather than short-term price fluctuations, may find value in Hyundai's competitive market position, innovative product offerings, and strategic vision for the future.

*Inputs from Moneycontrol*