On Tuesday, October 15, 2024, subscriptions for Hyundai Motor India Ltd., the top automaker, will be accepted in the country’s primary market for its anticipated mainboard initial public offering (IPO). On October 22, 2024, shares of the car major will trade on D-Street. All investor groups may continue to bid on the public offering through Thursday, October 17, 2024.
The IPO of Hyundai Motor Company’s Indian affiliate is expected to surpass the Life Insurance Corporation’s (LIC) ₹21,000 crore IPO, which went up for bids in May 2022, to become the biggest public offering in India. Hyundai Motor India is the current largest initial public offering (IPO) in Asia.
Hyundai is going to list on the stock market for the first time outside of South Korea with this IPO. Additionally, it will be the first automaker in India to go public in more than 20 years, following Maruti Suzuki India’s 2003 public offering. After Maruti Suzuki India, Hyundai Motor India is the country’s second-largest automaker based on sales.
Hyundai Motor India Company Details
With 7.3 million passenger vehicle sales in 2023, the Hyundai Motor Group—which comprises Hyundai and Kia—is the third-largest auto original equipment manufacturer (OEM) in the world. Since 1996, the South Korean enterprise has conducted business in India.
Hyundai Motor India mainly produces and markets four-wheeler passenger cars both inside and outside of India, as well as parts such as engines and transmissions. There are currently 13 passenger car models available, ranging from sedans and hatchbacks to SUVs and battery-electric vehicles.
The company runs a network of 1,366 sales locations and 1,550 service locations throughout India to offer mobility solutions. With US rivals Ford and General Motors unable to break through the local market, Hyundai Motor has been one of the few global automotive behemoths to establish a presence in India for more than 20 years.
By the end of March 2024, the business had exported close to 12 million passenger cars to India. In terms of domestic sales volumes, the South Korean company’s Indian division has been the second-largest auto OEM in the Indian passenger car market for the fiscal years 2022, 2023, and 2024 as well as the three months that concluded on June 30, 2024, according to a CRISIL research.
10 things investors must consider before subscribing
1. Hyundai Motor India IPO Key Dates
The subscription period for the Hyundai Motor India IPO begins on Tuesday, October 15, and ends on October 17, 2024. On Monday, October 15, the distribution to anchor investors for the Hyundai Motor India IPO is planned. On Monday, October 14, anchor investors can participate in the Hyundai Motor India IPO.
The foundation for the share allocation in the Hyundai Motor India IPO is expected to be resolved on Friday, October 18. The business will start processing refunds on Monday, October 21, and the shares will be deposited to the allottees’ demat accounts the same day as the refund. The BSE and NSE will host the initial listing of Hyundai Motor India shares, tentatively scheduled for Tuesday, October 22, 2024.
2. Hyundai Motor India IPO Price Band
The initial public offering (IPO) pricing range for Hyundai Motor India Limited is set at ₹1,865 to ₹1,960 per equity share, with a face value of ₹10. The ceiling price must be less than or equal to 120% of the floor price, but it must be at least 105% of the floor price. The face value of the equity shares is multiplied by 186.50 times the floor price, and by 196.00 times the cap price.
3. Hyundai Motor India IPO Lot Size
Investors may bid for a minimum of seven shares, as well as multiples of that number since the minimum lot size for an application is seven shares. Retail investors are tentatively asked to invest a minimum of ₹13,720.
4. Hyundai Motor India IPO Details
Hyundai Motor India intends to raise more than 27,870.16 crore, or around $3.3 billion. Hyundai will not be issuing new shares in the initial public offering (IPO), which will see its South Korean parent selling retail and other investors up to 142,194,700 shares (14.22 crore shares), or 17.5% of its entire owned unit, through the offer for sale (OFS) process. There is no fresh issue component to the IPO.
Therefore, the OFS of 14.22 crore shares with a face value of ₹10 apiece make up the book-built issue. The South Korean manufacturer will retain an 82.5% ownership following the IPO.
5. Hyundai Motor India IPO Reservation
Qualified institutional buyers will have access to half of the net public issue size (the offer less the employees’ reservation); anchor investors may receive up to 60% of this amount. Additionally, 15% of the shares are set aside for non-institutional investors, while the remaining 35% are allocated to individual investors. Up to 7,78,400 equity shares have been set aside by the corporation for its staff members.
6. Hyundai Motor India IPO Objectives
After subtracting offer-related expenses and any relevant taxes—which the promoter-selling shareholder must bear the responsibility of paying—the promoter-selling shareholder shall receive the entirety of the offer proceeds. The profits from the offer will not be given to the company.
7. Lead Manager and Registrar of Hyundai Motor India IPO
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, JP Morgan India Private Limited, and Morgan Stanley India Company Pvt Ltd are the book-running lead managers (BLRMs) for the mainboard IPO. At the same time, Kfin Technologies Limited is the key issue registrar.
8. Hyundai Motor India IPO Key Risks
Hyundai Motors gets its parts and supplies from a small number of vendors. Price increases for the parts and supplies needed for its operations could hurt the company’s operations and financial performance. Any disruption in the materials and parts supply could hurt its operations. The car major’s operations, parts, and materials are dependent upon its promoter, Hyundai Motor Company.
9. Hyundai Motor India IPO Listed Peers
The RHP states that Mahindra & Mahindra (M&M) (P/E of 29.96), Tata Motors Ltd (P/E of 11.36), and Maruti Suzuki India (P/E of 17.93 as of October 4, 2024) are the company’s listed peers.
10. Hyundai Motor India IPO Latest GMP
The current IPO GMP for Hyundai Motor India is +60. According to investorgain.com, this shows that the price of Hyundai Motor India’s shares was selling at a premium of ₹60 on the black market. The expected listing price of Hyundai Motor India shares is ₹2,020 per share, 3.06 per cent more than the IPO price of ₹1,960, taking into account the upper end of the IPO pricing band and the current premium on the grey market.
The current GMP is at ₹60, indicating a declining trend, based on the last 15 sessions of grey market transactions. According to the investigation by professionals at investorgain.com, the lowest GMP recorded is Re 0, and the maximum GMP is ₹570. Investors’ willingness to pay over the issue price is shown by the “grey market premium.”
