Moneycontrol Pro Panorama | A new 800-pound gorilla eyes the Street

In the heydays of internet businesses, some sighing at eye-popping private market valuations could also be heard on the Street.

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We had the Street wishing some years ago that Patanjali Ayurved would get listed. Baba Ramdev granted that wish partially by acquiring Ruchi Soya and then moving its foods businesses to the company, which now goes by the name of Patanjali Foods. Thankfully, Patanjali Ayurved is not yet listed, otherwise its shareholders would have been wondering at the logic of the company reportedly making a bid to acquire Rolta India under the corporate insolvency process.

In the heydays of internet businesses, some sighing at eye-popping private market valuations could also be heard on the Street. Whether it was that or the onset of a funding winter, many of these start-ups did take to public markets to fulfil those wishes too, although several of those IPOs made at heady valuations eventually left a trail of broken hearts and bank balances.

Then, there was the listing of LIC that had everyone salivating at the prospect of the public sector behemoth being finally held by the Indian public as minority shareholders. After all, it is one of the largest investors in the Indian market and while its life insurance business is no doubt the main offering, its sizeable investment portfolio that spans a vast spectrum of companies was also an attraction. The IPO succeeded, but the stock has disappointed and only recently crossed its IPO price.

In all this, nobody, nobody, held out a hope that Hyundai Motor would get listed. Not that they would not desire it. It was just assumed that similar to the low-profile South Korean conglomerates, such as Samsung and LG’s units, Hyundai’s unit too would remain privately held. These companies command a significant share of their respective industries, but prefer to be privately held. It should come as a big surprise to investors then that Hyundai is considering a listing of Hyundai Motor, with a $3 billion (Rs 24,900 crore) IPO that will value it at Rs 2.5 lakh crore. That will trump LIC’s issue size of Rs 21,000 crore although not by a very wide margin.

But this is not about which IPO is the biggest alone. For years, Maruti Suzuki has ruled the listed automobile roost, particularly when it comes to passenger cars. Investors will finally get one more company to do a peer comparison with, to decide which car stock they want to invest in. FMCG investors, for example, have HUL and ITC to choose from, as a large-cap FMCG stock to own. More choice is not only good for investors, but can also push company managements to run their business more efficiently from shareholders’ point of view.

These are reports at this point and the company has not confirmed the plan. However, if the IPO does happen and if even part of the issue involves a fresh issue of shares, then that may see Hyundai Motor roll out aggressive investments to grow its share of the Indian market. What’s more, if Hyundai’s experience is a good one, the other South Korean conglomerates too could go in for a listing. A local listing could be mutually beneficial as they seek to cement their foothold in a fast-growing large economy. It also widens and deepens the listed market, as one of the factors fund managers bemoan is a lack of adequate stocks to own that then leads to artificially higher valuations. On this front, there are 66 IPOs on the runway seeking to raise Rs 72,000 crore in FY25. Will Hyundai add to this list is the big question. Will there be enough demand for these stocks? Will their valuations be reasonable or seek to capitalise on the hype and leave investors nursing losses when the music slows down? These are all questions investors should ask even as they keep some powder dry for IPOs.

Meanwhile, the economy is in fine shape as seen from the PMI data, and as Manas Chakravarty writes in ‘Saare Jahaan Se Achcha, PMI Hamara’. “The reading is further proof that the corporate sector story in India is getting better and better, providing an underpinning to the buoyant sentiments in the equity markets.”

The highlight of today’s edition is the MC Pro Election 2024 Portfolio put together by our independent and in-house research team. The core of their investment thesis is this: “Against this backdrop, our focus has been on companies which are building the future and have the best prospects of benefiting from the post-election government pushing the pedal on reforms.”

They have identified 14 stocks that they believe can capitalise on the economy’s growth trajectory, once the new government takes over and the economy heads for a reset. Their stellar track record and conviction in this opportunity makes this a must-read. Don’t miss it.

Investing insights from our research team

Apeejay Surrendra Park Hotels: Will it be profitable for investors to check into this IPO?

SBI’s Q3 earnings get hit by one-off; valuation undemanding

Tata Motors Q3FY24: New products help JLR shine

IndiGo continues to soar high, an investment for long haul

Sun Pharma: Superior execution makes us constructive

RateGain Q3 FY24 – The strong show continues

Dixon Technologies Q3: Explosive growth

Heritage Foods: What can drive the stock rerating from here?

What else are we reading?

MC Pro Inside Edge: Braveheart buyer in Paytm, operators target Punjab & Sind Bank, surveillance drama at delisting-bound company

What budget allocations tell us about the government’s spending priorities

UPL gets stuck in a global maelstrom of inventory overload in chemicals sector

SBI needs staff to roll up its sleeves to lift shareholder returns

PMSY -- Will rooftop solar be third-time lucky?

The Eastern Window: China ready to challenge Japan to become the world’s biggest auto exporter

The financier turning China’s noodle joints and karaoke bars into a data goldmine (republished from the FT)

Stockology | Unabated selling may be triggered in Nifty at 22,390 and 20,870

RBI’s action against Paytm hurts Buy-Now-Pay-Later ecosystem

Tamil Nadu: Actor Vijay's foray into politics — Whose cart will be upturned

When Lionel Messi disappointed a Hong Kong desperate for good cheer

Karnataka’s plan to fix prices for Uber-Ola cabs is going to boomerang badly

Technical Picks: Jindal Steel and Power, Exide Industries, Gulf Oil Lubricants, Tata Chemicals, USD-INR and Aluminium (These are published every trading day before markets open and can be read on the app). 

Ravi Ananthanarayanan
Moneycontrol Pro