Hyundai India IPO: Subscription rate goes up but GMP declines
Hyundai Motor India's initial public offering (IPO) has received a 42% subscription on the second day of bidding. According to the National Stock Exchange (NSE) data (as of until 3:00 pm), bids were received for 4.17 crore shares out of the total 9.97 crore shares on offer. The retail individual investors' portion of this ₹27,870-crore IPO was subscribed at a rate of 38%.
Hyundai India's IPO: Non-institutional investors and QIBs show interest
The non-institutional investors category of Hyundai Motor India's IPO was subscribed 26%. Meanwhile, the portion reserved for qualified institutional buyers (QIBs) was subscribed 58%. Notably, the employee portion of the issue was subscribed 1.31 times. Before this public bidding phase, Hyundai had raised ₹8,315 crore from anchor investors on Monday.
Hyundai Motor India's GMP continues to decline
The gray market premium (GMP) for Hyundai Motor India's shares has taken a significant dive in the lead-up to its listing. At the time of writing, Hyundai Motor India's GMP stood at a meagre ₹31, signaling a premium of just 1.58%. In September, the GMP was hovering around ₹570 and has been on a consistent decline. Despite being a mega IPO, investors are unlikely to make any noteworthy gains at the time of listing on October 22.
Hyundai India's IPO: A historic event in the automotive industry
Hyundai Motor India's IPO will be the largest in the country, bigger than LIC's ₹21,000 crore initial share sale. The IPO will be open for public subscription until October 17 and carries a price band of ₹1,865-1,960 per share. It is a historic moment as this is the first IPO by an automaker in over two decades since Maruti Suzuki's listing in 2003.
Hyundai India's IPO: A strategic move by the parent company
The whole issue of Hyundai Motor India's IPO is an offer for sale (OFS) of 14,21,94,700 equity shares by its promoter, Hyundai Motor Company (HMC). The South Korean parent company is cutting down its stake through this OFS route. However, since it's entirely an OFS, no money from the IPO will go to Hyundai Motor India, currently the second-largest carmaker in the country after Maruti Suzuki.
Hyundai India's IPO: Aiming to enhance visibility and brand image
HMIL hopes that the listing of its shares will increase its visibility, improve its brand image, and offer liquidity with a public market for its shares. At the upper end of the price band, the IPO is valued at ₹27,870 crore (approximately $3.3 billion), with the company's market capitalization pegged at around ₹1.6 lakh crore (roughly $19 billion) post-listing.
Hyundai India's IPO: Positive recommendations from brokerage firms
Several brokerage firms have issued positive recommendations for Hyundai's IPO, noting the company's strong market position, robust financials, and growth potential. ICICI Direct, Bajaj Broking, and SBI Securities have all advised investors to subscribe. LKP Securities and Anand Rathi have echoed these sentiments, noting Hyundai's strong standing in the Indian automotive landscape. They recommend subscribing to the IPO with a focus on long-term gains.
