(Mohan Bhulani, NTI): Ahead of its highly anticipated initial public offering (IPO) set to open today, Hyundai Motor India has secured ₹8,315.3 crore from 225 anchor investors, according to exchange data. On October 14, the company allocated 4.2 crore equity shares to these investors at the upper end of its price band, ₹1,960 per share.
The anchor book attracted a diverse range of investors from across the globe, including government funds, life and general insurance companies, emerging market funds, and public employee retirement and pension funds. Notable participants include Boeing, pension funds from American states, New York, Germany, and India’s National Pension Scheme. In addition, dividend stock funds, public and private sector funds, and wealth management firms also took part.
The list of anchor investors features prominent global institutions such as the Monetary Authority of Singapore, Fidelity, the Government of Singapore, New World Fund Inc., Government Pension Fund Global, and American Funds Insurance Series New World Fund. Other major global investors, including Citigroup Global, Abu Dhabi Investment Authority, Baillie Gifford, Vanguard, the City of New York Group Trust, Moorea Fund, BlackRock, Aegon Investment Management, Schroders, Canada Pension Plan Investment Board, JP Morgan, Goldman Sachs, Copthall Mauritius, Société Générale, Morgan Stanley, and HSBC Global, also contributed to the anchor book.
Hyundai Motor IPO Details
Hyundai Motor India, the country’s second-largest carmaker, is aiming to raise ₹27,870 crore, positioning the company at a valuation of ₹1.59 lakh crore. The IPO is entirely an offer for sale (OFS) of 14.22 crore shares by its South Korean parent company, with a price band ranging from ₹1,865 to ₹1,960 per share. As the issue is entirely an OFS, Hyundai Motor India will not receive any of the proceeds from the IPO.
The minimum application for retail investors is one lot, consisting of 7 shares, which amounts to ₹13,720. Investors can apply for a maximum of 14 lots, or 98 shares, totaling ₹192,080.
The three-day subscription window opens today, October 15, and will close on October 17, 2024. The allotment of shares is expected to be finalized by October 18, 2024, with the company’s listing on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) tentatively scheduled for October 22, 2024.
Grey Market Performance and Broker Recommendations
In the lead-up to the nation’s biggest IPO, Hyundai Motor India’s grey market premium (GMP) has seen a sharp decline. The GMP fell from a peak of ₹570 on September 27 to just ₹45, indicating a likely flat listing at around ₹2,005, a 2.3% increase over the issue price.
Despite the dip in the grey market, several brokerages have expressed positive views on the IPO. Firms like ICICI Direct, Anand Rathi Research, LKP Securities, Aditya Birla Money, and SBI Securities have recommended subscribing to the issue with a long-term investment horizon. Many believe Hyundai Motor India’s valuation presents an attractive opportunity, as it appears to be at a discount when compared to the industry leader, Maruti Suzuki India.
In addition to the IPO, Hyundai Motor India has ambitious plans to expand its electric vehicle (EV) portfolio. The company’s Chief Operating Officer, Tarun Garg, recently announced that Hyundai will launch four EV models, with the Creta EV expected by March 2025.
With a diverse anchor investor base, solid broker support, and its commitment to EVs, Hyundai Motor India’s IPO is poised to be a significant event in India’s automotive and financial landscape.
