[Click eStock] "Hyundai Motor's India Subsidiary IPO Positively Impacts Corporate Value"

Hana Securities evaluated Hyundai Motor's Indian subsidiary IPO on the 22nd as positive for enhancing corporate value. They maintained a 'Buy' investment rating and a target price of 310,000 KRW.

As of last year, Hyundai Motor's Indian subsidiary has a production capacity of approximately 752,000 units, and cumulatively produced about 578,000 units as of September this year. Its market share in India is 11.3%, with key models including Creta, Venue, Exter, i10, and i20.

Song Seon-jae, a researcher at Hana Securities, stated, "Currently, the vehicle penetration rate is below 10%, so there is significant room for expansion with future economic development." He added, "Hyundai Motor currently operates two plants in the Chennai area, and last year acquired General Motors (GM)'s Talegaon plant, which is planned to start operations next year." He continued, "Although there is no immediate cash inflow from this listing, it enables rapid capital procurement through future capital increases and direct investments," and analyzed, "This is considered a preliminary step to secure timely investment funds, taking into account the growth potential of the Indian automobile market."

Researcher Song explained that if a special shareholder return is made, it would positively affect the stock price. He said, "More than 3 trillion KRW in cash, after deducting related costs and taxes from the stock sale proceeds, will flow into Hyundai Motor, and some of this may be used for share repurchases and cancellations." He added, "According to Hyundai Motor's shareholder return policy announced at the end of August, a 4 trillion KRW scale share repurchase plan over the next three years will begin execution from next year. Therefore, if a special shareholder return occurs after the Indian subsidiary's listing, the total shareholder return (TSR) target of 35% will become visible earlier." He further noted, "An annual dividend yield of 5.1% can be expected, and from a supply-demand perspective, this will also improve, contributing positively to Hyundai Motor's stock price trend."