Hyundai India IPO to Smash Records: What It Means for Maruti Suzuki, Tata Motors, and M&M Shares

The Indian stock market is set to witness a historic event with the upcoming Hyundai India IPO, poised to become the largest initial public offering (IPO) ever in the country. Hyundai India plans to sell about 13% of its stake, aiming to raise nearly ₹25,000 crore. This would surpass the previous record set by LIC’s IPO. Analysts suggest that Hyundai’s IPO could outperform other leading auto stocks like Maruti Suzuki, Tata Motors, and Mahindra & Mahindra (M&M).

Hyundai India IPO Details

Sandeep Pandey, Founder of Basav Capital, highlighted the massive scale of the Hyundai India IPO. With a valuation around ₹25,000 crore from the sale of a 13% stake, it is expected to break the record for the biggest-ever IPO in India. It’s still unclear if the IPO will be entirely new shares, a mix of new shares and an offer for sale (OFS), or entirely an OFS. However, most of the funds raised are likely to be used to strengthen Hyundai’s balance sheet, enhancing its competitiveness against peers like Maruti Suzuki, M&M, and Tata Motors.

Potential Impact on the Auto Sector

Manish Chowdhury, Head of Research at StoxBox, believes that Hyundai’s significant IPO could positively influence the valuation of the entire Indian auto sector. Hyundai, the second-largest passenger vehicle manufacturer in India by sales volume, is expected to benefit from better profitability and a premium market position compared to Maruti Suzuki. Hyundai’s focus on electric vehicles (EVs) and plans for new product launches in the next 1-2 years could increase competition for established players like Tata Motors and M&M.

According to Chowdhury, Hyundai’s focus on enhancing its value chain in the EV sector by setting up manufacturing facilities in India could boost its market position and competitiveness, particularly in the SUV segment.

Expert Opinions

Amit Goel, Co-Founder & Chief Global Strategist at Pace 360, noted that Hyundai and Maruti Suzuki operate in similar market segments in India. A successful IPO for Hyundai could lead to increased investments in research, production expansion, and aggressive marketing. This might intensify competition for Maruti Suzuki in terms of market share and sales.

The success of Hyundai’s IPO could also boost investor confidence in the automotive sector, leading to more interest and investment in stocks like Maruti Suzuki, Tata Motors, and M&M. Investors might shift their focus based on Hyundai’s growth potential and valuation. If Hyundai’s IPO performs well, it could positively influence the sector, but if it underperforms, it could create negative sentiment, impacting all major auto stocks.

Tata Motors and M&M, although competing in different segments (Tata Motors with passenger and commercial vehicles, and M&M with SUVs and utility vehicles), could also be affected by Hyundai’s strategies post-IPO.

New Record

The Hyundai India IPO is expected to set a new record in the Indian market and could significantly impact the valuation and competitiveness of other major auto companies like Maruti Suzuki, Tata Motors, and M&M. The proceeds from the IPO could boost Hyundai’s market position, particularly in the EV and SUV segments, intensifying competition within the Indian automotive industry.