The Hyundai Motor India IPO which was a 100% offer for sale by its parents opened for subscription on Tuesday in the price band of ₹1,865 and ₹1,960 per share. File.
| Photo Credit: Reuters

India’s biggest ever Initial Public Offering (IPO) of Hyundai Motor India Ltd., the bidding for which ended on Thursday. received lukewarm response from retail investors but was subscribed 2.37 times helped by Qualified Institutional Buyers (QIBs).  

As per data from the BSE, updated at 7 p.m. on Thursday, the IPO was subscribed 6.97 times in the QIBs category and 0.50 times in Retail Individual Investors category. The employee portion was subscribed 1.74 times.

Going by this, the IPO received lowest retail subscription among some of the big IPOs that had hit the Indian capital markets. 

While the LIC IPO had seen retail investor subscription of 1.99 times, it was 2.31 times for Coal India and about 15 times for Reliance Power Ltd., according to analysts.

The Hyundai Motor India IPO which was a 100% offer for sale by its parents opened for subscription on Tuesday in the price band of ₹1,865 and ₹1,960 per share. 

At the upper band the IPO would fetch ₹27,870.16 crore.

The 100% OFS by the parent was not liked by the retail investors as no money would be coming to the company, analysts said adding the pricing was too aggressive to make it attractive for retail investors to make any profit. Thus the gray market premium was low.

Commenting on the below expectation participation of retail investors Arun Kejriwal, founder, Kejriwal Research said, “They did not apply because the issue was expensive by about ₹200 and that is why the market premium crashed from ₹700 to Rs ₹500.” 

He said the QIB portion was subscribed more because they are long term investors who have deep pockets. “But retail investor looks for a quick return and they do not have that kind of capacity to hold on to the issue,” he added.

The allotment of shares is scheduled on Friday and shares will be listed on 22 October.

This is the largest IPO in the country, surpassing LIC’s initial share sale of ₹21,000 crore.
| Photo Credit: Reuters

The Initial Public Offering (IPO) of Hyundai Motor India Limited, the Indian arm of South Korean automaker Hyundai, got fully subscribed on the third day of the bidding on Thursday (October 17, 2024).

The ₹27,870 crore initial share sale got bids for 14,07,68,187 shares against 9,97,69,810 shares on offer, translating into 1.41 times the subscription, as per NSE data till 13:21 hours.

The quota for Qualified Institutional Buyers (QIBs) got 3.88 times subscription while the portion meant for Retail Individual Investors (RIIs) received 44% subscription. The non-institutional investors part fetched 39% subscription. Hyundai Motor India Limited (HMIL) on Monday raised ₹8,315 crore from anchor investors.

This is the largest IPO in the country, surpassing LIC’s initial share sale of ₹21,000 crore. The IPO has a price band of ₹1,865-1,960 per share. The IPO is entirely an offer for sale (OFS) of 14,21,94,700 equity shares by promoter Hyundai Motor Company (HMC), with no fresh issue component.

This is the first initial share sale by an automaker in over two decades, following Japanese carmaker Maruti Suzuki’s listing in 2003. Since the public issue is completely an OFS, Hyundai Motor India Limited, the second largest carmaker in India after Maruti Suzuki, will not receive any proceeds from the IPO.

HMIL stated that it expects that the listing of the equity shares will enhance its visibility and brand image and provide liquidity and a public market for the shares.

At the upper end of the price band, the IPO size has been pegged at ₹27,870 crore ($3.3 billion) and the company’s market valuation at around ₹1.6 lakh crore (about $19 billion) post-issue.

HMIL commenced operations in India in 1996 and currently, sells 13 models across segments. Kotak Mahindra Capital Company Limted, Citigroup Global Markets India Private Ltd, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited and Morgan Stanley India Company Private Limited are the book-running lead managers to the offer.

File picture of Hyundai Motor India logo
| Photo Credit: Reuters

The initial public offer of Hyundai Motor India Ltd, the Indian arm of South Korean automaker Hyundai, received 9 per cent subscription during the initial hours of bidding on Tuesday (October 15, 2024).

The ₹27,870 crore initial share sale received bids for 89,92,522 shares against 9,97,69,810 shares on offer, as per NSE data till 11:39 hours.

The portion for Retail Individual Investors (RIIs) got subscribed 15% while the non-institutional investors category fetched 6 per cent subscription.

Hyundai Motor India Ltd (HMIL) on Monday raised ₹8,315 crore from anchor investors.

This is the largest IPO in the country, surpassing LIC’s initial share sale of ₹21,000 crore.

The IPO, with a price band of ₹1,865-1,960 per share, will remain open for public subscription from October 15 to October 17.

The IPO is entirely an Offer For Sale (OFS) of 14,21,94,700 equity shares by promoter Hyundai Motor Company (HMC), with no fresh issue component.

This is the first initial share sale of an automaker in over two decades, following Japanese carmaker Maruti Suzuki’s listing in 2003. The South Korean parent is diluting some of the stake through the OFS route.

Since the public issue is completely an OFS, Hyundai Motor India Ltd, the second largest carmaker in India after Maruti Suzuki, will not receive any proceeds from the IPO.

HMIL stated that it expects that the listing of the equity shares “will enhance our visibility and brand image and provide liquidity and a public market for the shares”.

At the upper end of the price band, the IPO size has been pegged at ₹27,870 crore ($3.3 billion), and the company’s market valuation at around ₹1.6 lakh crore (about $19 billion) post-issue.

HMIL commenced operations in India in 1996 and currently, sells 13 models across segments.

Kotak Mahindra Capital Company Ltd, Citigroup Global Markets India Private Ltd, HSBC Securities and Capital Markets (India) Private Ltd, J.P. Morgan India Private Ltd and Morgan Stanley India Company Private Ltd are the book running lead managers to the offer.

Image for representational purposes only.
| Photo Credit: REUTERS

South Korean automaker’s Indian arm Hyundai Motor India Ltd will launch the largest initial public offering (IPO) in the country’s history next week, aiming to raise ₹27,870 crore (about $3.3 billion).

This IPO will surpass the ₹21,000 crore offering by Life Insurance Corporation of India (LIC) in May 2022.

Apart from these two, the biggest initial share-sales in India include One97 Communications (Paytm), which mobilised ₹18,300 crore in November 2021, followed by Coal India’s ₹15,199 crore in October 2010, Reliance Power’s ₹11,563 crore in January 2008, and General Insurance Corporation of India’s ₹11,176 crore in October 2017.

Hyundai Motor India Ltd (HMIL) has set a price band of ₹1,865 to ₹1,960 per share for the offering, valuing the automaker at ₹1.6 lakh crore (about $19 billion).

The offering will open for public subscription on October 15 and conclude on October 17. Anchor investors will bid on October 14.

With this massive IPO, Hyundai Motor India seeks to build on its growing market presence and capitalise on strong demand for its vehicles in the country. The offering is expected to draw significant investor interest.

The company’s proposed IPO is entirely an Offer-for-Sale (OFS) of 142,194,700 equity shares by promoter Hyundai Motor Company, with no fresh issue component.

This development marks a significant milestone for the Indian industry, as it is the first initial share sale of an automaker in over two decades, following Japanese carmaker Maruti Suzuki’s listing in 2003.

The South Korean parent is diluting some of the stake through the OFS route. Since the public issue is completely an OFS, Hyundai Motor India Ltd, the second largest carmaker in India after Maruti Suzuki India, will not receive any proceeds from the IPO.

HMIL expects that the listing of the equity shares will enhance its visibility and brand image and provide liquidity and a public market for the shares.

At the upper end of the price band, the IPO size has been pegged at Rs 27,870 crore HMIL commenced operations in India in 1996 and is selling 13 models across segments.

The IPO launch comes at a time when the primary market is experiencing strong interest from both issuers and investors across various sectors.

Moreover, 63 companies have already mobilised around ₹64,000 crore collectively via mainboard, marking a 29% increase from ₹49,436 crore collected by 57 firms through the route in the entire 2023.

Representational image of a Hyundai car at a showroom in Delhi.
| Photo Credit: Reuters

Hyundai Motor India has obtained approval for its initial public offering from the Securities and Exchange Board of India (SEBI), according to two sources familiar with the situation.

The South Korean automaker plans to raise $3 billion at a roughly $20 billion valuation, sources previously told Reuters.

This would make it the first carmaker to go public in India in two decades, following market leader Maruti Suzuki’s IPO in 2003.

Hyundai India did not respond to a request for comment.

The automaker is looking to reclaim market share from increasingly formidable domestic rivals, such as Tata Motors, by expanding its SUV lineup.

It plans to launch its first India-made electric vehicle early next year and introduce at least two gasoline-powered models tailored for the market starting in 2026, three sources with knowledge of the company’s plans previously told Reuters.

India third-largest Hyundai market

India is the third-biggest revenue generator globally for Hyundai after the U.S. and South Korea, and it has already invested $5 billion in the country with commitments to pump in another $4 billion over the next decade.

Separately, SEBI also approved the IPO of SoftBank-backed food delivery giant Swiggy, which is targeting a valuation of around $15 billion and aims to raise $1-1.2 billion, according to multiple sources familiar with the matter.

Hyundai has appointed bankers for the initial public offering which could be India’s biggest ever, and the company’s first listing outside South Korea. File
| Photo Credit: PTI

Hyundai Motor’s planned $3 billion IPO in India will help the carmaker score two goals in one go: expand in one of the world’s fastest growing markets and tackle the so-called “Korea discount” that suppresses the value of its business back home.

Hyundai, India’s second-biggest carmaker behind Maruti Suzuki with a 15% market share, has appointed bankers for the initial public offering which could be the country’s biggest ever, and Hyundai’s first such listing outside South Korea.

India’s sizable market

The India IPO is aimed at accelerating its expansion in a country where it has operated for over 25 years and where its affordable cars are popular with price-conscious Indians, according to analysts and four people familiar with the carmaker’s plans.

The listing will also reduce Hyundai’s dependence on its parent for funds, giving it the financial muscle to take on rivals like Tata and chart its own growth plans in a market that accounts for 14% of total global sales, the sources said.

“India will become the ground to raise money for local projects. Hyundai understands the market dynamics,” said Gaurav Vangaal of S&P Global Mobility.

The company plans to use the IPO proceeds largely to fund the launch of EVs in the country, as well as set up a charging network and a battery facility, the sources said. The money will also be used to expand its manufacturing capacity.

India is a “sizable” market for Hyundai, and more capital raised locally will help it build EV infrastructure there, said Kevin Yoo an analyst at Daol Investment & Securities.

A spokesperson for Hyundai declined to confirm the IPO plans, reiterating an earlier statement that said the company “constantly reviews various activities, including listing of overseas subsidiaries, to increase corporate value”.

The ‘Korea discount’ problem

The IPO plans come as India’s stock markets are soaring. The benchmark Indian indices have doubled between 2019 and 2023, while Seoul’s KOSPI index has risen just 30% in the same period.

Two of the sources said Hyundai wants to cash in on this growth and also tackle the “Korea discount”, a term analysts use to refer to the typically lower valuations for South Korean companies compared to global peers because of lower dividend pay outs, the dominance of opaque conglomerates and geopolitical risks involving North Korea.

Hyundai is considering a valuation of $30 billion for the India unit IPO, the sources said, which is more than half of its Korea-listed parent which trades in Seoul at a market capitalisation of $46 billion. A rich valuation for India could boost valuations at home, one of the sources added.

Jonathan Pines, lead portfolio manager for Asia ex-Japan at Federated Hermes Limited, in a report last year on the “Korea Discount” phenomenon, said about one in three South Korean stocks trade below a price-to-book multiple of one, which means a company’s market cap is below the value of its net assets.

Hyundai trades at a price-to-book ratio of 0.69 in Seoul. Indian automakers Tata Motors trades at 6.48 and Maruti Suzuki at 4.96.

Some analysts, however, say fixing the “Korea discount” problem will not be so easy. “I don’t believe this is something that can be resolved simply by seeking to be listed elsewhere – although that can help fundraising and elevate their local brand image to some extent,” said Lee Jung-bin, an analyst at Shinhan Securities, adding, “Having said that it could potentially unlock better valuation than the parent company in Korea as investors could focus more on local performance there.”