The much-anticipated Hyundai Motor India Ltd (HMIL) Initial Public Offering (IPO), the largest in Indian history, has opened for subscription today. Investors can participate in this IPO from October 15 to October 17. With a price band of Rs 1,865 to Rs 1,960 per share, this offering has attracted significant attention. However, the grey market premium (GMP) for Hyundai shares has seen a sharp decline, currently standing at Rs 25, which is a small premium over the issue price.
Grey Market Premium Falls Sharply
The grey market premium for Hyundai shares has dropped by over 89%, from a previous high of Rs 570. The decline indicates cautious sentiment among investors in the unregulated grey market, though a marginal premium is still present. Investors are closely monitoring these trends as they decide whether to subscribe to this massive IPO.
Subscription Status on Day 1
In the early hours of Day 1, Hyundai’s IPO received 9% subscription out of the 9,97,69,810 shares on offer. According to data from the NSE (National Stock Exchange) as of 11:39 AM, 89,92,522 shares had been bid for. The Retail Individual Investors (RIIs) segment achieved a 15% subscription, while non-institutional investors subscribed to 6% of the available shares.
Anchor Investors and IPO Details
Ahead of the public offering, Hyundai Motor India Ltd raised Rs 8,315 crore from anchor investors. This IPO surpasses the previous record held by LIC’s IPO of Rs 21,000 crore, making it India’s biggest-ever initial share sale. The total size of the IPO stands at Rs 27,870 crore (USD 3.3 billion), and it values the company at around Rs 1.6 lakh crore (USD 19 billion) post-issue.
Offer For Sale and Company Background
Hyundai’s IPO is entirely an Offer For Sale (OFS), with 14,21,94,700 equity shares being sold by Hyundai Motor Company (HMC), the parent company. No new shares are being issued, meaning HMIL will not receive any proceeds from the sale. This is the first automaker IPO in two decades, since Maruti Suzuki listed its shares in 2003.
Enhancing Brand Image
While HMIL won’t gain financially from the IPO, the company believes the listing will boost its visibility, enhance its brand image, and provide liquidity to shareholders. Hyundai Motor India Ltd, which began operations in 1996, is currently the second-largest carmaker in India, following Maruti Suzuki. The company sells 13 models across various segments in the country.
The lead managers of the IPO include Kotak Mahindra Capital, Citigroup Global Markets, HSBC Securities, J.P. Morgan, and Morgan Stanley India.
