October 2024 marks a significant period for the Indian stock market, with two major IPOs—Hyundai Motor India and Garuda Construction and Engineering—opening for subscription.
While Hyundai’s IPO is the largest in India’s history, Garuda’s IPO has also generated considerable attention in the market due to its impressive financials and debt-free status. This article compares the key details of both IPOs to help you determine which one is a better investment option.
Overview of Hyundai Motor India IPO
1. IPO Dates
- Opening Date: October 15, 2024
- Closing Date: October 17, 2024
- Listing Date: October 22, 2024 (Tentative)
2. IPO Size
Hyundai Motor India aims to raise a massive $3.3 billion (₹27,000 crore) through the offer for sale (OFS) of 14.22 crore shares. The price band has been set between ₹1,865 and ₹1,960 per share, making it India’s largest IPO.
3. Company Overview
Hyundai Motor India is the second-largest carmaker in the country, with a strong foothold in the passenger vehicle market. The company has been operating in India since 1996 and is a subsidiary of South Korea’s Hyundai Motor Company.
Overview of Garuda Construction IPO
1. IPO Dates
- Opening Date: October 8, 2024
- Closing Date: October 10, 2024
- Listing Date: TBD
MUST READ: Hyundai Motor India IPO Set to Open: India’s Largest Public Offering Details and Key Insights
2. IPO Size
Garuda Construction and Engineering’s IPO is significantly smaller, aiming to raise ₹264 crore through a fresh issue of 1.83 crore equity shares and an offer for sale of 95 lakh shares. The price band is set between ₹92 and ₹95 per share, with a Grey Market Premium (GMP) of ₹5.
3. Company Overview
Garuda Construction is a leading player in India’s civil construction sector, focusing on residential, commercial, and infrastructure projects. The company is debt-free and has a strong order book of ₹1,408 crore.
Financial Performance Comparison
Hyundai Motor India Financials (FY2022-FY2024)
| Year | Revenue (₹ Crore) | Net Profit (₹ Crore) | Profit Margin (%) |
|---|---|---|---|
| 2022 | 32,488.34 | 4,382.87 | 13.5% |
| 2023 | 37,567.98 | 5,489.65 | 14.6% |
| 2024 (Q1) | 17,567.98 | 1,489.65 | 13.7% |
Garuda Construction Financials (FY2022-FY2024)
| Year | Revenue (₹ Crore) | Net Profit (₹ Crore) | Profit Margin (%) |
|---|---|---|---|
| 2022 | 77.02 | 18.78 | 24.4% |
| 2023 | 154.18 | 36.43 | 23.6% |
| 2024 (Q1) | 85.32 | 19.76 | 23.2% |
Key Investment Considerations
Hyundai Motor India IPO Strengths
- Market Leadership: Hyundai is the second-largest carmaker in India and has a diversified portfolio of sedans, SUVs, and electric vehicles (EVs).
- Global Brand: Hyundai is part of the Hyundai-Kia group, the third-largest auto manufacturer globally, giving it a strong global presence and brand recognition.
- Electric Vehicle (EV) Expansion: Hyundai plans to expand its EV offerings in India, positioning itself well in the growing EV market.
Hyundai Motor India IPO Risks
- Price Sensitivity: The auto industry is highly sensitive to fluctuations in raw material prices, which could impact Hyundai’s profitability.
- Dependence on Parent Company: Hyundai Motor India depends heavily on its South Korean parent for parts and materials, which could be a risk if supply chains are disrupted.
Garuda Construction IPO Strengths
- Debt-Free: Garuda’s debt-free status is a significant strength, giving the company more flexibility in reinvesting profits for growth.
- Strong Order Book: With an order book of ₹1,408 crore, Garuda Construction has a steady pipeline of future revenue.
- Rapid Growth: The company’s revenue and profit growth have been impressive, with a CAGR of 26% between FY2022 and FY2024.
Garuda Construction IPO Risks
- High Competition: Garuda operates in a highly competitive market with players like PSP Projects Ltd and Capacite Infraprojects Ltd. Maintaining its growth momentum may be challenging.
- Dependence on New Contracts: Like many construction firms, Garuda’s future success relies heavily on securing new contracts. Any slowdown in the construction sector could affect its revenue.
Peer Comparison: Hyundai vs Garuda
| Company | IPO Size (₹ Crore) | Revenue (₹ Crore) | Net Profit (₹ Crore) | P/E Ratio | Debt-Free |
|---|---|---|---|---|---|
| Hyundai Motor India | 27,000 | 37,567.98 | 5,489.65 | 19.5x | No |
| Garuda Construction | 264 | 154.18 | 36.43 | 19.5x | Yes |
Expert Recommendations
Hyundai Motor India IPO Review
Market analysts suggest that Hyundai Motor India’s IPO offers long-term value due to the company’s strong market position, global brand, and expansion into electric vehicles. However, the high price band may deter retail investors looking for quick gains. Experts recommend subscribing for long-term benefits, especially for those interested in the growing EV market.
Garuda Construction IPO Review
On the other hand, Garuda Construction’s IPO is seen as a safer, more affordable option with high growth potential due to its debt-free status and strong financial performance. Market experts recommend subscribing for both short-term listing gains and long-term growth potential, as the company is well-positioned to capitalize on India’s growing construction sector.
MUST READ: Garuda Construction and Engineering IPO: Key Details, GMP, Issue Date, and Listing Information
Conclusion: Which IPO Is Right for You?
Both IPOs offer unique opportunities for investors, depending on their risk appetite and investment goals. Hyundai Motor India’s IPO is ideal for those seeking to invest in a global auto brand with strong long-term prospects, especially in the EV space.
Meanwhile, Garuda Construction’s IPO is more suited to investors looking for affordable, high-growth opportunities in India’s booming construction sector.
Disclaimer
The above information is for educational purposes only and does not constitute financial advice. Please consult a financial advisor before making investment decisions.