Hyundai Motor India Ltd. (HMIL) has successfully closed its Initial Public Offering (IPO), fully subscribed at 2.37 times by the end of the bidding on October 17, 2024. This IPO, valued at Rs 27,870 crore, has set a new record as India’s largest-ever public offering, surpassing Life Insurance Corporation of India’s (LIC) Rs 21,000 crore IPO. The IPO opened for subscription on October 15, 2024, and saw a strong surge in demand on the final day, with investors bidding for 23.63 crore shares, far exceeding the 9.97 crore shares available.
Investor demand was led by Qualified Institutional Buyers (QIBs), whose portion was oversubscribed by 6.97 times. Non-Institutional Investors (NIIs) subscribed to 60% of their quota, while retail investors subscribed to 50% of theirs. Hyundai’s employees also actively participated, subscribing to 1.74 times the shares reserved for them, which included a special discount of Rs 186 per share.
The IPO was priced within a fixed band of Rs 1,865 to Rs 1,960 per share and was structured as an Offer for Sale (OFS), meaning the proceeds will go to Hyundai Motor Global, the parent company, rather than Hyundai Motor India. Despite this, the offering attracted significant attention due to the company’s strong position in the Indian market. Hyundai is India’s second-largest original equipment manufacturer (OEM) and the second-largest exporter of passenger vehicles, holding a 14.6% market share.
However, the grey market premium (GMP) for Hyundai’s shares has seen a sharp drop, declining to Rs 14, which indicates a minimal premium of 0.71% over the upper IPO price band. The GMP had been falling throughout the bidding period, dropping by nearly 80%, reflecting cautious investor sentiment, likely due to volatility in the broader market and a mixed outlook for the auto sector. Despite this, many analysts have maintained a ‘Subscribe’ rating on the IPO, citing Hyundai’s solid long-term growth prospects.
In September 2024, Hyundai’s sales figures showed a 10% year-on-year decline, with 64,201 units sold, and overall sales for the year stood at 5.77 lakh units, largely flat compared to the previous year. Despite these figures, analysts remain optimistic about the company’s future, driven by Hyundai’s strong SUV lineup and stable financials.
The share allotment for the IPO is scheduled for October 18, 2024, and investors can check their allotment status through the registrar, Kfin Technologies Ltd. The shares are expected to be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on October 22, 2024.
Disclaimer: This information is provided for general informational purposes only and does not constitute financial, investment, or legal advice. Investment in securities involves risks, including the risk of loss. Past performance is not indicative of future results. Investors are advised to conduct their own research or consult with a licensed financial advisor before making any investment decisions. Market conditions, stock prices, and company performance can fluctuate, and future outcomes may differ from the opinions expressed.
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