The highly anticipated mainboard initial public offering (IPO) of Hyundai Motor India, one of India’s leading auto majors, is set to open for subscription on Tuesday, October 15, 2024. Investors will be able to bid for the shares until Thursday, October 17, 2024, with the company expected to make its stock market debut on October 22, 2024.
This IPO is poised to be India’s largest public issue, surpassing the previous record set by the Life Insurance Corporation’s (LIC) IPO in May 2022, which raised Rs 21,000 crore. Hyundai Motor India’s IPO will not only be the biggest in India but also one of the largest in Asia recently.
The upcoming public issue will mark Hyundai’s first-ever stock market listing outside South Korea. It will also make Hyundai Motor India the first carmaker to go public in the country in more than two decades, since the IPO of Maruti Suzuki India in 2003. Hyundai Motor India is currently the second-largest carmaker by sales in India, following Maruti Suzuki India.
Here are the top 10 things you should know about Hyundai Motors India IPO
1. Hyundai Motor India IPO Opening Dates
The Hyundai Motor India IPO is set to open for subscription on Tuesday, October 15 i.e tomorrow, and will close on Thursday, October 17, 2024. The allocation to anchor investors is scheduled for Monday, October 14.
The basis of allotment for the IPO is expected to be finalized on Friday, October 18, with refunds initiated on Monday, October 21. The shares will be credited to the demat accounts of successful allottees the same day. Hyundai Motor India shares are tentatively set to debut on the BSE and NSE on Tuesday, October 22, 2024.
2. Hyundai Motor India IPO Price Band
Hyundai Motor India Limited has set the price band for its upcoming IPO at Rs 1,865 to Rs 1,960 per equity share, with a face value of Rs 10 each. The cap price represents 196 times the face value, while the floor price stands at 186.5 times the face value.
The cap price is also at least 105% of the floor price but does not exceed 120% of it, offering a range for investors as the company prepares for its much-anticipated public debut.
3. Hyundai Motor India IPO Latest Grey Market Premium (GMP)
The Hyundai Motor India IPO is witnessing a grey market premium (GMP) of Rs 60 today, suggesting that the shares are trading at a premium in unofficial markets, according to Chittorgarh.com
Based on the upper end of the IPO price band and the current GMP, the estimated listing price for Hyundai Motor India shares is projected to be Rs 2,020 apiece, reflecting a potential gain of 3.06% over the IPO price of Rs 1,960.
4. Reservation for Investor Categories in Hyundai Motor India IPO
The Hyundai Motor India IPO has allocated 50% of the total offering to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Investors (NIIs), and the remaining 35% reserved for retail investors.
5. Merchant Bankers and Registrars of Hyundai Motor India IPO
The Hyundai Motor India IPO is being managed by a consortium of leading merchant bankers, which includes Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), JP Morgan India, and Morgan Stanley India. KFin Technologies has been appointed as the registrar for the IPO.
6. Key Risk for Hyundai Motor India IPO
Hyundai Motors relies heavily on a limited number of suppliers for essential parts and materials. Any increase in the prices of these components could negatively impact the company’s business and operational results.
Additionally, disruptions in the supply chain may adversely affect operations. The automaker also depends on its promoter, Hyundai Motor Company, for crucial operational support and materials.
7. Hyundai Motor India Sales and Market Presence
In September 2024, Hyundai Motor India reported sales of 64,201 units, marking a 10% decline year-on-year. Year-to-date, the company has sold 577,000 units, showing no significant change compared to the previous year. Hyundai remains the second-largest Original Equipment Manufacturer (OEM) and exporter of passenger vehicles in India, with a current domestic market share of 14.6%.
8. Hyundai Motor India IPO vs Listed Peers PE
Hyundai Motor India’s IPO Red Herring Prospectus (RHP) lists its peers in the market, including Maruti Suzuki India, which has a price-to-earnings (P/E) ratio of 17.93 as of October 4, 2024. Other competitors include Tata Motors Ltd with a P/E of 11.36, and Mahindra & Mahindra (M&M) boasting a P/E of 29.96.
9. Hyundai Motor India’s IPO Objective
The promoter-selling shareholder will retain all proceeds from the offering after deducting associated costs and applicable taxes, which will be the responsibility of the promoter. Notably, Hyundai Motor India will not receive any proceeds from this offer.
10. Why is The Hyundai Motor India IPO Important?
Hyundai’s IPO marks the first public offering by an Indian automaker in two decades, following Maruti Suzuki’s debut in 2003. This launch coincides with Indian stock markets reaching record highs, reflecting a growing trend of new companies entering the public arena.
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