Hyundai India IPO subscribed 200% but GMP sinks below 1%
Hyundai Motor India's initial public offering (IPO) has been fully subscribed on the last day of bidding. The ₹27,870-crore mega issue was subscribed 200%, mostly by qualified institutional buyers (QIBs). Despite the success, the gray market premium (GMP) fell slightly to 0.71%. In September, the GMP was hovering around ₹570 and has been on a consistent decline. The company has fixed a price band of ₹1,865-₹1,960 per share for the IPO.
QIBs and NIIs show strong interest in Hyundai IPO
The IPO received a strong response from QIBs, who bid for more than six times the offered shares. Non-institutional investors (NIIs) also participated actively, subscribing to the issue at 0.41 times and bidding for around 86,72,251 shares against the 2,12,12,445 shares reserved for them. The retail portion was booked at 0.45 times around 1:50pm on the last day of bidding. The shares will list on the NSE and BSE on October 22.
Hyundai's IPO proceeds to fund R&D and innovation
The entire proceeds from the IPO will go to Hyundai Motor Global, the parent company of Hyundai Motor India. The management has said that these funds will be used for research and development (R&D) as well as new innovative offerings. This move comes in line with Hyundai's goal of making itself the largest production base in Asia for its parent company.
Analysts recommend long-term investment in Hyundai IPO
Analysts have suggested a long-term investment strategy for the Hyundai IPO, given the company's strong market position and financial stability. ICICI Direct said, "We assign a subscribe rating to Hyundai, given steady growth prospects amid industry tailwinds, robust financials, and a healthy SUV product slate." Anand Rathi also agreed, saying the issue is fully priced and recommended a 'Subscribe - Long Term' rating for the IPO.
Hyundai's strong performance and future prospects
Hyundai is India's second-largest carmaker with a diverse portfolio of 13 passenger vehicle models. The company operates two production facilities in Chennai, which are currently running at over 90% capacity utilization. For the quarter ending June 2024, Hyundai Motor India reported a revenue of ₹17,344 crore and a net profit of ₹1,489.65 crore. These figures underscore the company's strong performance and potential for future growth.
