Hyundai India IPO: 18% Subscription on Day 1, Retail Oversubscribed at 26%

Hyundai Motor India's ₹27,870 crore initial public offering (IPO) received a steady response on its first day with 18% of the total offer subscribed.

Retail portions saw 26% of shares booked till 3 pm IST on Tuesday with retail investors bidding for 1.3 crore shares out of 4.94 crore available. Non-institutional investors submitted bids for 27.66 lakh shares, which constituted 13% of the 2.12 crore shares on offer. Employees had bid for 80% of their allotted shares, where 6.19 lakh out of 7.78 lakh shares were subscribed. The portion reserved for QIBs witnessed 5% subscription. The IPO closes on October 17.

Hyundai, the country's second-largest automobile manufacturer, raised ₹8,315.3 crore from 225 anchor investors on October 14. Here is some of the prominent global institutional investors: Government of Singapore, New World Fund Inc, Monetary Authority of Singapore, Fidelity, and Government Pension Fund Global, which invested ₹2,191.66 crore in Hyundai.

Check Hyundai Motor India IPO Anchor Allocation at 29.83%

The company issued 4.2 crore equity shares to anchor investors at a price of ₹1,960 per share. Other global notable investors, including Baillie Gifford, Vanguard, Blackrock, and the Canada Pension Plan Investment Board, also became shareholders of Hyundai through the anchor book.

This IPO will be India's largest ever and will top the record of Life Insurance Corporation. Of 4.24 crore equity shares of the firm sold to anchor investors, 1.46 crore or 34.42% of shares were snapped up by 21 domestic mutual fund schemes, including ICICI Prudential Mutual Fund, HDFC MF, and SBI MF.

The Hyundai IPO is going to be an entirely offer-for-sale (OFS) 14.21 crore shares from the equity purse of Hyundai Motor Company, the Korean promoter of the firm, without any fresh issue. This is going to be the first IPO originating from an automobile house after over two decades, with the listing of Maruti Suzuki way back in 2003. Hyundai is reducing its stake through the OFS route.

The IPO would be helpful to Hyundai in increasing its brand value and provide liquidity to its shares by creating a public market. Relative peers Maruti Suzuki India Limited (MSIL) goes at 29.3-30.4X FY24 earnings, Mahindra & Mahindra (M&M) at 30-37X, and Tata Motors at 10-11.4X.

Read more about Hyundai Motor India IPO

Founded in May 1996, Hyundai Motor India is the Indian subsidiary of Hyundai Motor Company, the third-largest carmaker in the world by passenger vehicle sales in 2023 and the second-largest in the Indian market since 2009, based on domestic volume sales.