New Delhi: Hyundai Motor India Limited (HMIL) IPO will open for subscription from October 15. This IPO is completely an Offer for Sale (OFS) and the money raised from it will go to HMIL's parent company and South Korean automaker Hyundai. Let us know whether you should invest in this IPO or not.

What will be the price band

The price band of Hyundai's IPO is Rs 1,865-1,960 per share. This will be India's largest IPO, surpassing LIC's Rs 21,000 crore IPO. Retail investors will be able to invest in the IPO from October 15 to October 17. Allotment will be done on October 18. Hyundai's entry on BSE and NSE will be on October 22. The registrar of the issue is Kaffin Tech.

Brokerage firm opinion

The brokerage believes that Hyundai's IPO is worth subscribing to given its market share and growth. LPK Securities has given a subscribe rating to Hyundai's IPO. The brokerage firm says that Hyundai Motor India Limited (HMI) is the second largest player in the passenger vehicle segment in the domestic markets.

Hyundai has been in the Indian markets for almost three decades and has gone through the ups and downs of the industry. HMI is a well-established player in India, with almost equal penetration in rural and urban markets. They have been launching iconic brands in India and are strongly present in cars of every engine type. LPK Securities believes that it can be successful in the Indian market just like Maruti Suzuki.

Hyundai Valuation

Ashwin Patil, equity research analyst at LKP Securities Limited, expressed his opinion on the comparison of Hyundai IPO's valuation with that of Maruti Suzuki, Tata Motors and Mahindra & Mahindra (M&M). He said, 'If we look at the valuation, then the comparison can only be made between Maruti Suzuki India and Hyundai Motor India, because these two are only in the passenger vehicle segment. Companies like Tata Motors and Mahindra & Mahindra also make commercial vehicles. Therefore, comparing them will not give the correct valuation.'

On valuations, he further said, "As far as Maruti is concerned, it is trading at 29x-30x FY 24 earnings. On the other hand, HMI is trading at 26x at the upper limit of its IPO price band i.e. 1960. This seems reasonable to me. Hyundai Motors has fewer positive factors like 15 per cent market share, strong return ratios, 13%+ margins, 68 per cent volumes coming from the SUV segment. It can be subscribed for the long term."