Hyundai Motor IPO India Subscription Status Highlights: Hyundai Motor India’s public issue has achieved full subscription, receiving bids for 41.7 million shares out of the 14.22 crore available. The retail investor segment is currently 38% subscribed, while the non-institutional investors (NIIs) segment has seen a 60% subscription.
These two categories make up 50% of the IPO. Additionally, the Qualified Institutional Buyers (QIB) portion experienced a remarkable seven-fold subscription, with institutional investors bidding for 19.72 crore shares against the 28.28 crore on offer.
Related party transactions—such as rising royalty rates and revenue from spare parts—are managed by Hyundai’s group company, Hyundai Mobis. This dynamic raises concerns about cost structures and profit margins.
The growth of the automobile industry continues to lag, with Hyundai Motor India witnessing a notable decline in its retail market share. From FY22 to FY25 year-to-date (YTD), the company’s market share has dropped by 230 basis points, now standing at 14.1%. In a further setback, Hyundai Motor India has no significant model launches planned over the next 6 to 12 months, potentially limiting its ability to capture market interest and compete effectively.
The book-running lead managers for the Hyundai Motor IPO include Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, J.P. Morgan India Private Limited, and Morgan Stanley India Company Pvt Ltd. Kfin Technologies Limited serves as the registrar for the issue.
The subscription details for the Hyundai Motor India Ltd (HMIL) IPO, which opened for public bidding from October 15 to October 17, 2024, indicate a strong interest in the offering. On Day 3, the demand surged significantly, particularly from QIBs, who subscribed at 6.97 times, followed by NIIs at 0.60, Retail at 0.50, and Employees at 1.74, culminating in an overall subscription of 2.37 times.
The second day saw an uptick in participation, with QIBs subscribing at 0.58, NIIs at 0.26, Retail at 0.38, and Employees at 1.31, leading to a total of 0.42 times.
The subscription details for the Hyundai Motor India Ltd (HMIL) IPO, which opened for public bidding from October 15 to October 17, 2024, indicate a strong interest in the offering. On Day 1, the subscription was low, with Qualified Institutional Buyers (QIBs) at 0.05, Non-Institutional Investors (NIIs) at 0.13, Retail investors at 0.27, and Employees at 0.81, resulting in a total subscription of 0.18 times.
The growth of the automobile industry continues to lag, with Hyundai Motor India experiencing a decline in its retail market share, which fell by 230 basis points from FY22 to FY25 YTD, now standing at 14.1%. The company does not have any significant model launches planned in the next 6 to 12 months. Furthermore, related party transactions, including rising royalty rates and spare parts revenue, are managed by the group company Hyundai Mobis. Competing with its sibling brand Kia India adds another layer of complexity to Hyundai's efforts to maintain its market share.
Investors can verify their allotment status by visiting the Kfin Technologies website.
Hyundai Motor India Ltd (HMIL) launched its initial public offering (IPO) for public subscription from October 15 to October 17, attracting significant interest with a subscription rate of 2.37 times.
Hyundai Motor India, a part of the Hyundai Motor Group, gains early access to advanced global automotive technologies, including IT services provided by Hyundai Autoever. These services encompass areas such as passenger vehicle IT, smart manufacturing, mobility solutions, data security, and enterprise IT. Hyundai Autoever's innovative "smart factory" platform enables the company to implement flexible, automated manufacturing processes, allowing for the customized production of vehicles.
Hyundai Motor India’s record-breaking IPO, the largest in the country’s history, has been fully subscribed, paving the way for its listing next week. The Rs 27,870 crore offering was oversubscribed by almost 2.4 times by the end of the bidding process, despite cautious interest from retail investors. Robust demand from institutional buyers, especially foreign investors, drove the oversubscription, with this group claiming nearly 7 times their allotted shares, accounting for 28% of the total issue.
The share allocation for the Hyundai Motor IPO is detailed as follows: Qualified Institutional Buyers received 2,82,83,260 shares, accounting for 28.35% of the total. Non-Institutional Investors were allocated 2,12,12,445 shares, representing 21.26%. Within this category, Small Non-Institutional Investors (SNII) who bid below Rs 10 lakh were allotted 70,70,815 shares, or 7.09%, while Big Non-Institutional Investors (BNII) with bids above Rs 10 lakh received 1,41,41,630 shares, constituting 14.17%. Retail Individual Investors led the allocation with 4,94,95,705 shares, making up 49.61%. Additionally, the Employees Quota was assigned 7,78,400 shares, representing 0.78% of the total.
The growth of the automobile industry is currently sluggish, with medium-term retail growth for the first half of FY25 showing just a 1% year-over-year increase. Hyundai Motor India has experienced a decline in market share, losing 230 basis points and now holding 14.1% as of FY22-25 year-to-date, according to Vahan data. Additionally, the company does not have any significant model launches planned in the next 6 to 12 months. Related party transactions have also risen, with royalty rates increasing from 2.2% of sales in FY24 to 2.8% in Q1 FY25. Furthermore, revenue from spare parts is accounted for in the group company Hyundai Mobis, rather than in the listed entity. The competitive landscape is also impacted by the presence of sister company Kia India in overlapping segments.
On October 18, 2024, Hyundai Motor India’s IPO experienced a significant drop in its Grey Market Premium (GMP), reaching a low of Rs -57. This contrasts sharply with the highest GMP of Rs 570, which was recorded on August 27, 2024. The IPO's upper price band is set at Rs 1,960, while the estimated listing price on October 18 stands at Rs 1,903, reflecting a decrease of 2.91% from the upper price band.
LKP Securities has analyzed the stock and estimates that it will trade at 26 times its FY24 earnings at the upper end of the price band. This valuation is considered reasonable when compared to its closest peer, Maruti Suzuki, which trades at 29 times its FY24 earnings. Based on these factors, the firm recommends subscribing to the stock and suggests it as a long-term investment for better returns.
Hyundai Motor India, a subsidiary of Hyundai Motor Group, ranks as the third-largest auto original equipment manufacturer (OEM) worldwide based on passenger vehicle sales in 2023. The company benefits from the extensive support of Hyundai Motor Corporation (HMC) across various operational areas. Since 2014, HMC has invested around Rs 1,875.03 billion in global research and development (R&D) through June 2024, concentrating on key emerging mobility sectors, including electrification, shared mobility, and autonomous driving.
Hyundai Motor India has shown steady growth in both revenue and profit margins. In FY24, the company's revenue increased at a CAGR of 21%, reaching Rs 69,829 crore. Meanwhile, its Profit After Tax (PAT) experienced a remarkable CAGR of 45%, totaling Rs 6,060 crore from FY22 to FY24, driven by improved sales volume and enhanced operating efficiency.
Hyundai Motor India remains committed to R&D investments and introducing new passenger vehicles to strengthen its market position. The company aims to solidify its presence across both affordable and premium segments, with Anand Rathi Research noting a premiumization strategy, focusing on higher-end trims with elevated average selling prices.
The automobile industry’s growth remains weak, with Hyundai Motor India's retail market share declining by 230 basis points between FY22 and FY25 YTD, reaching 14.1%. The company has no major volumetric model launches planned for the next 6-12 months. Additionally, related party transactions, such as increased royalty rates and spare parts revenue, are handled by the group company Hyundai Mobis. Competing with its sister firm Kia India further complicates market share retention.
Retail investors showed limited interest in Hyundai Motor India's IPO, subscribing to only 0.5 times the issue. However, the IPO was driven by institutional buyers, with a QIB subscription of 0.58 times by Day 2.
According to Elara Securities, "Hyundai Motor India is one of the few OEMs in India with a powertrain-agnostic stance and capabilities across BEV, HEV, PHEV, CNG, and ethanol. It also offers various transmission types, including AMT, DCT, iVT, and manual."
The IPO price range is between Rs 1,865 and Rs 1,960 per share, with a face value of Rs 10. Retail investors must bid for at least 7 shares. The total number of shares, 812,541,100, will remain unchanged post-issue.
The IPO is scheduled between October 15 and 17, 2024. The cut-off time for UPI mandate confirmation is 5 PM on October 17. The basis of allotment will be finalized on October 18, with refunds and share credits to Demat accounts initiated on October 21. The listing date is set for October 22.
On October 18, 2024, Hyundai Motor India's IPO touched its lowest Grey Market Premium (GMP) of Rs -57. The highest GMP, Rs 570, was recorded on August 27, 2024. The upper price band of the IPO is Rs 1960, and the estimated listing price on October 18 is Rs 1903, marking a 2.91% decrease from the upper price band.
Qualified Institutional Buyers (QIBs) received 2,82,83,260 shares, accounting for 28.35% of the total. Non-Institutional Investors (NIIs) were allocated 2,12,12,445 shares, representing 21.26%. Within this, Small Non-Institutional Investors (SNII), bidding below Rs 10 lakh, were allotted 70,70,815 shares (7.09%), while Big Non-Institutional Investors (BNII), with bids above Rs 10 lakh, received 1,41,41,630 shares (14.17%). Retail Individual Investors dominated the allocation with 4,94,95,705 shares, making up 49.61%. Additionally, the Employees Quota was allocated 7,78,400 shares, or 0.78%.
Hyundai Motor India's IPO has bagged Rs 8,315.28 crore from anchor investors, with the bid date scheduled for October 14, 2024. A total of 42,424,890 shares are available for these investors. The lock-in period for 50 per cent of the shares will end on November 17, 2024, while the remaining shares will be subject to a 90-day lock-in period, which will conclude on January 16, 2025.
The Share allocation for Hyundai Motor IPO is as follows: Qualified Institutional Buyers received 2,82,83,260 shares, accounting for 28.35 per cent of the total. Non-Institutional Investors were allocated 2,12,12,445 shares, representing 21.26 per cent. Within this category, Small Non-Institutional Investors (SNII), who bid below Rs 10 lakh, were allotted 70,70,815 shares, or 7.09per cent, while Big Non-Institutional Investors (BNII), with bids above Rs 10 lakh, received 1,41,41,630 shares, constituting 14.17 per cent. Retail Individual Investors dominated the allocation with 4,94,95,705 shares, making up 49.61 per cent. Additionally, the Employees Quota was allocated 7,78,400 shares, which is 0.78 per cent of the total.
The Hyundai Motor India IPO touched the lowest GMP price Rs -57 on October 18, 2024. The highest GMP Price was Rs 570 on August 27, 2024. The upper price band of the IPO is Rs 1960. The estimated listing price on October 18 is Rs 1903 which is 2.91 per cent less than the upper price band of Rs 1960.