Hyundai Motor India IPO Launch: The highly anticipated mainboard Initial Public Offering (IPO) of Hyundai Motor India Ltd will open for subscription on Tuesday, October 15, 2024, marking a significant moment in India’s primary market. Trading of the company’s shares on the BSE and NSE will commence on October 22, 2024. The public issue will remain open for bidding until Thursday, October 17, 2024, for all investor categories.

This IPO is set to be the largest in India, surpassing the ₹21,000 crore LIC IPO in 2022, and one of the biggest in Asia. It also marks Hyundai’s first stock market listing outside South Korea and is the first public issue by an Indian automaker in over two decades, since Maruti Suzuki went public in 2003. Hyundai Motor India is the second-largest carmaker in India by sales, following Maruti Suzuki.

Company Overview

Hyundai Motor Group, which includes Hyundai and Kia, ranked as the world’s third-largest automotive OEM in 2023, selling 7.3 million vehicles. Hyundai has been operating in India since 1996, offering 13 passenger models, including sedans, hatchbacks, SUVs, and electric vehicles. With a network of 1,366 sales points and 1,550 service locations, the company has made a lasting mark on the Indian market, where several global players, such as Ford and General Motors, struggled to succeed. Hyundai has exported nearly 12 million vehicles from India to date.

IPO Key Details

• Subscription Dates: October 15 to October 17, 2024
• Anchor Investors: Allocation starts October 14, 2024
• Allotment Date: October 18, 2024
• Refund Initiation & Share Credit: October 21, 2024
• Listing Date: October 22, 2024

IPO Price Band & Lot Size

• Price Band: ₹1,865 – ₹1,960 per share (₹10 face value)
• Lot Size: Minimum of 7 shares, with a retail investment starting at ₹13,720.

Offer for Sale (OFS) Details

The IPO will raise approximately $3.3 billion (₹27,870 crore) through an OFS, with Hyundai’s parent company selling up to 14.22 crore shares, representing 17.5% of its stake. No new shares will be issued, and Hyundai will retain an 82.5% stake post-IPO. If shares are priced at the upper range, the company’s valuation will reach $19 billion (₹15,954 crore), making this the largest IPO of the year in India.

Reservation and Allocation

• 50% reserved for Qualified Institutional Buyers (QIBs), with 60% of that allocated to anchor investors.
• 15% allocated to Non-Institutional Investors (NIIs).
• 35% reserved for Retail Investors.
• 7,78,400 shares reserved for employees.

Risks & Objectives

Hyundai Motor India relies on a limited number of suppliers, and disruptions in material availability could impact operations. The IPO’s proceeds will go entirely to the promoter (Hyundai Motor Company) to offset costs and taxes related to the offering, with no new funds raised for the company.

Lead Managers and Registrar

Kotak Mahindra Capital, Citigroup, HSBC, JP Morgan, and Morgan Stanley are the book-running lead managers. KFin Technologies will handle the registrar duties.

Market Outlook & Listed Peers

Hyundai’s peers in the Indian market include Maruti Suzuki (P/E 17.93), Tata Motors (P/E 11.36), and Mahindra & Mahindra (P/E 29.96).

Grey Market Premium (GMP)

As of the latest data, the IPO’s GMP stands at ₹60, suggesting an estimated listing price of ₹2,020 per share — a 3.06% premium over the upper IPO price of ₹1,960. However, the GMP has seen fluctuations, ranging from ₹0 to ₹570 over the past 15 sessions, reflecting market sentiment.

This IPO is expected to generate significant interest, given Hyundai’s strong market presence, the growing demand for premium vehicles, and favorable market conditions.