Hyundai Motor India’s highly anticipated Initial Public Offering (IPO) opened for investment today, Tuesday, 15th October.
This IPO is the largest in India’s history. As per the data from the Bombay Stock Exchange (BSE), by 12:00 pm on the first day, the IPO had been subscribed by 10%.
Investors have until 17th October to participate in the issue. The price band for the shares has been set between Rs 1,865 and Rs 1,960 per equity share.
Hyundai Motor India, the Indian arm of South Korea’s Hyundai Motor, secured Rs 8,315 crore from anchor investors on Monday, a day before the IPO opened.
The Largest IPO in India
The Hyundai Motor IPO is valued at Rs 27,870 crore (approximately $3.3 billion). For comparison, the previous largest IPO in India was from LIC at Rs 21,000 crore.
Other notable IPOs include One97 Communications (Paytm) with Rs 18,300 crore in November 2021, Coal India Limited’s Rs 15,199 crore in October 2010, Reliance Power’s Rs 11,563 crore in January 2008,
and General Insurance Corporation of India’s Rs 11,176 crore in October 2017.
Weak Performance in the Grey Market
According to Investorgain.com, Hyundai shares are currently trading in the grey market at a premium of just Rs 40.
This suggests the shares might list at Rs 2,000 with only a 2% premium. The stock’s performance in the grey market has been poor, with a 92% drop from earlier prices.
On September 27th, the shares were available in the grey market at Rs 570, but the price has been declining daily since then. Analysts view this as a sign of a potentially weak listing.
Key Investors and Offer for Sale (OFS)
Prominent investors such as New World Fund Inc., Government of Singapore, Fidelity Funds, BlackRock Global Funds, JP Morgan Funds, HDFC Life Insurance,
and SBI Life Insurance have been allocated shares as anchor investors. The IPO consists of an offer for sale (OFS) of 142,194,700 equity shares by Hyundai Motor, the promoter.
Since the entire IPO is based on the OFS, Hyundai Motor India Limited (HMIL) will not receive any funds from the IPO.
Background of Hyundai Motor India
Hyundai Motor India started operations in 1996 and currently offers 13 models across different segments.
This IPO is significant because it marks the first time in two decades that an automobile manufacturer has launched an IPO in India, following Maruti Suzuki’s IPO in 2003.
HMIL believes that the listing of equity shares will enhance the company’s visibility and brand image, while also providing liquidity for its shares in the public market.
With this massive IPO, Hyundai hopes to capitalize on the strong demand for its vehicles in India and expects to attract significant interest from investors.
