Hyundai Motor India IPO: The initial public offering (IPO) of India’s second-largest auto original equipment manufacturer (OEM), Hyundai Motor India, was oversubscribed 42 per cent on the second day of issue. The mainboard IPO of the Indian subsidiary of South Korea’s Hyundai Motor Company opened for subscription on Tuesday, October 15 and will remain open for bidding for all investor groups until Thursday, October 17, 2024.
Half of the net public issue size (the offer less employees’ reservation) has been reserved for qualified institutional buyers, of which up to 60 per cent may be allocated to anchor investors. Further, 15 per cent of shares are reserved for non-institutional investors, and the remaining 35 per cent of shares are for retail investors. The company has reserved up to 7,78,400 equity shares for its employees.
Also Read: Hyundai Motor India IPO day 2: GMP, subscription status, review, other details. Apply or not?
Hyundai Motor India IPO Subscription Status
On the second day, Hyundai Motor India IPO was subscribed 0.42 per cent. According to BSE data, the portion reserved for QIBs was booked the highest at 58 per cent, the portion reserved for NIIs was booked at 26 per cent, and the portion reserved for retail investors 38 per cent. The employee portion was booked 1.31x. The IPO received 4,17,33,328 share applications against 9,97,69,810 shares offered on Wednesday. On the first day of issue, Hyundai Motor India IPO was subscribed 18 per cent.
Hyundai Motor India IPO Latest GMP
Hyundai Motor India IPO GMP today is +17. This indicates that the Hyundai Motor India share price was trading at a premium of ₹17 in the grey market, according to investorgain.com. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Hyundai Motor India shares is indicated at ₹1,977 apiece, which is 0.87 per cent higher than the IPO price of ₹1,960.
According to the latest 15 sessions of grey market activities, the current GMP is at ₹17, indicating a downward trend. The lowest GMP recorded is Re 0, and the highest GMP is ₹570, as per the analysis by experts at investorgain.com. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Hyundai Motor India IPO Details
The leading auto major’s IPO is set to become the largest public issue in India, surpassing the Life Insurance Corporation’s (LIC) IPO worth ₹21,000 crore, which opened for bidding in May 2022. Hyundai Motor India’s IPO is also one of Asia’s biggest IPOs recently.
Hyundai Motor India plans to raise around $3.3 billion, or over ₹27,870.16 crore. Hyundai will not issue new shares in the IPO which will involve its South Korean parent selling up to 142,194,700 shares (14.22 crore shares) or a 17.5 per cent of its stake in the wholly owned unit to retail and other investors through the offer for sale (OFS) route. The IPO does not include any fresh issue component.
Hence, the book-built issue is an OFS of 14.22 crore shares with a face value of ₹10 each. After the IPO, the South Korean automaker will still hold an 82.5 per cent stake. If shares are priced at the top end of the range, the IPO effectively values the top automaker at $19 billion or ₹15,954 crore in the country’s biggest stock offering this year.
Hyundai Motor India Limited’s IPO price band has been fixed at ₹1,865 to ₹1,960 per equity share with a face value of ₹10. The cap price shall be at least 105 per cent of the floor price and less than or equal to 120 per cent of the floor price. The floor price is 186.50 times the face value of the equity shares, and the cap price is 196.00 times the face value of the equity shares.
The minimum lot size for an application is seven shares, which means investors can bid for a minimum of seven shares and in multiples thereof. Tentaively, the minimum amount of investment required by retail investors is ₹13,720.
Hyundai Motor India IPO basis of allotment of shares will be finalised on Friday, October 18, and the company will initiate refunds on Monday, October 21, while the shares will be credited to the demat account of allottees on the same day following refund. Hyundai Motor India shares will debut on BSE, NSE with tentative listing date fixed as Tuesday, October 22, 2024.
Hyundai Motor India Company Details
The Hyundai Motor Group, which includes Hyundai and Kia, is the world’s third-largest OEM based on passenger vehicle sales, having sold 7.3 million vehicles in 2023. The South Korean company has been operating in India since 1996.
Hyundai Motor India primarily manufactures and sells four-wheeler passenger vehicles and parts, such as transmissions and engines, in India and outside India. Currently, the vehicle portfolio includes 13 passenger vehicle models, including sedans, hatchbacks, SUVs, and battery EVs.
The company provides mobility solutions, operating a network of 1,366 sales points and 1,550 service points across India. Hyundai Motor has been operating in India for over two decades, and is one of the few foreign automotive giants to make a mark here, with US rivals Ford and General Motors failing to crack the local market.
The promoter-selling shareholder will receive all offer proceeds after deducting offer-related costs and applicable taxes, which the promoter-selling shareholder will be responsible for paying. The company will not receive any of the offer’s proceeds.
As of March 31, 2024, the company has sold nearly 12 million passenger vehicles in India through exports. According to a CRISIL report, the Indian arm of the South Korean company has been the second largest auto OEM in the Indian passenger vehicles market in fiscals 2022, 2023, and 2024 and the three months ended June 30, 2024, and also since fiscal 2009 (in terms of domestic sales volumes).
Hyundai Motor India IPO Review
‘The domestic PV industry volume is expected to increase at a CAGR of 4.5- 6.5 per cent depending on the CAGR growth of India’s GDP. Hyundai Motor has been the second largest contributor to these volumes since Fiscal 2009 and has maintained its position since then due to continued traction for popular SUV models like Creta and Venue coupled with new vehicle launches and the launch of upgrades of its popular models,” said domestic brokerage firm Master Capital Services.
“The company plans to maintain its strong position by expanding its passenger vehicle portfolio, leveraging its deep understanding of consumer preferences, and focusing on increasing its EV market share. It also intends to continue the premiumization of its passenger vehicle portfolio and focus on calibrated manufacturing capacity expansion and efficient capital allocation. The issue is fully priced, and investors interested in the company can invest in the IPO for the long term,” added the brokerage.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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