Tale of the Tape 

Howdy folks. Welcome back to the Daily Rip!

Markets started the week on a positive note with the Nifty and Sensex each ending +0.7%. Midcaps (+0.4%) and Smallcaps (+0.4%) had a decent day too. The advance-decline ratio was evenly split.

Most sectors ended in the green. Real Estate (+1.6%), IT (+1.3%) and Banks (+1.3%) saw the most buying. Media (-1%) and Metals (-0.3%) witnessed selling pressure.

Hyundai Motor India’s massive IPO kicks off tomorrow! Check out our analysis below to help you decide whether to subscribe.

DMart was the top NSE 500 loser after a disappointing Q2. Read our top story below on why some experts are worried.

Wipro, IEX and Bajaj Housing Finance saw big movements today. Look at their charts below to find out why.

IPCA Laboratories (+2%) hit a record high after Motilal Oswal upgraded the stock; the brokerage sees a further +16% upside from current levels.

Sudarshan Chemical (-7%) will consider raising funds at its meeting on October 16.

Ola Electric (-3%) was down after facing regulatory scrutiny over its latest aggressive discount scheme.

Block deals. Trent was in focus after 10.4 lakh shares (0.3% equity) changed hands in a block deal; the buyers and sellers were not known. Transformers and Rectifiers (India) hit a +5% upper circuit after 27 lakh shares traded hands.

Premier Energies rallied +10% intraday after its subsidiary bagged multiple orders worth Rs 765 cr.

Here are the closing prints:

IPO
Hyundai Motor IPO Review

India’s BIGGEST IPO is here! Hyundai Motor India’s public offer kicks off tomorrow, with the price band set at Rs 1,865 - Rs 1,960 p/sh. The company aims to raise Rs 27,870 cr from the IPO.

Hyundai is India’s second-largest passenger vehicle maker, with a ~15% market share as of FY24. In the high-growth + high margin utility vehicle segment, its volume share is 63% vs industry average of 60%. Around 24% of its overall topline also comes from exports, which is a big growth channel. 

FYI - this IPO is purely an ‘Offer for Sale’, which means none of the proceeds will come into the company. PS - this does not mean Hyundai has no plans to invest in India; it actually has Rs 32,000-cr in capex lined up over the next decade.

FY24 Snapshot:

• Revenue:Rs 69,829 cr; +16% YoY

• EBITDA: Rs 9,133 cr; +21% YoY

• EBITDA Margin: 13.1% vs 12.5% YoY

• PAT: Rs 6,060 cr; +29% YoY

Big Picture: Let’s get the negatives out of the way. Yes, like all companies with foreign parents, it paid out a massive dividend in FY24 (Rs 10k cr +). It also recently upped its royalty rate to 3.5% of sales and can increase it to 5% without shareholder approval. Finally yes, its proposed valuation is several times more than its parent. But that doesn’t mean it's all bad. 

A 26-27x P/E is decent considering the Indian auto market’s growth outlook. Experts believe Hyundai’s future will depend on two big triggers. First, how quickly it can expand capacity. It's currently in the process of going from 8.25 lakh to 11 lakh units. The second is its EV push. We’re getting the Creta EV in Q4FY25 and we’ll see whether it can take on the Tata Nexon.

FWIW - most experts say subscribe for the long-term and expect decent returns. Grey market data suggest its potential listing gains have crashed in recent days and may list only at a 3% premium.

Stocktwits Specials
Stocktwits India Momentum Index!

The Stocktwits India Momentum Index snapped its 5-day gaining streak and ended down -0.3% 

Motilal Oswal closed in the green for the 4th time in the past 5 days. PS - the stock is trading at record highs! Oracle Financial Software (+1.5%) was the only other stock to gain more than a percent. On the flip side, Epigral (-3%) and Cochin Shipyard (-2%) struggled.

PS - The Stocktwits India Momentum Index highlights the top 10 performing companies based on their weekly returns. Plus, we bring you tons of exclusive content on the featured stocks including SEBI RA trade ideas, latest news & earnings updates, fundamental and technical insights.