Maruti Suzuki Share Price Drops as Hyundai Motor India Files for IPO | Stock Market Update

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Maruti Suzuki share price saw a decline of over 2% on the Bombay Stock Exchange (BSE) in the latest trading session. Emkay Global Financial Services Ltd has retained a ‘reduce’ stance on Maruti Suzuki India Ltd, setting a target price of ₹11,200. The brokerage firm highlighted that Hyundai Motor India has outperformed Maruti Suzuki in terms of profitability due to a stronger mix and premium positioning, although the advantage was somewhat offset by lower scale.

Following Hyundai Motor India’s filing of the Draft Red Herring Prospectus (DRHP) for its upcoming IPO in the Mumbai stock market, the market has been abuzz with anticipation. The IPO comprises a complete offer for sale (OFS) of 14.21 crore shares with a face value of ₹10 each. The South Korean parent company plans to sell up to 17.5% of its stake in the Indian subsidiary through this offering.

Analysts point out that Hyundai’s focus on premiumisation is evident in its DRHP, with a significant increase in the share of passenger vehicles (PVs) costing over ₹1 million. The percentage jumped to 49% in 9MFY24 from 32.4% in FY21, while the volume contribution from SUVs also saw an uptick to 53% in FY23 from 45% in FY21. The company’s strategy includes continued emphasis on premium offerings, including SUVs and mid-high range PVs, with plans for distinct EV releases across various price segments. Hyundai aims to introduce four EV models, including the electric Creta, by Q4FY25.

Hyundai has also earmarked a significant investment of ₹320 billion for the development of EV manufacturing in India, along with building a robust supply chain across regions like Tamil Nadu and Maharashtra. This move towards high localisation levels in EVs, coupled with the introduction of EV-focused platforms, is expected to drive down costs and enhance price competitiveness for the brand.

Maintaining over 90% capacity utilisation is a key goal for Hyundai India, with plans to position the country as an export hub for emerging markets like South Asia, Latin America, Africa, and the Middle East. With strong backing from Hyundai Motors globally, the company enjoys support in various aspects such as management, R&D, design, product planning, and more. Over 90% local sourcing as of CY23 highlights the brand’s commitment to the Indian market, which has seen steady growth in sales volumes over the past few years.