The Hyundai India IPO seems to have attracted strong demand from qualified institutional buyers, but retail individual investors showed limited interest.
Key Highlights
The Hyundai India initial public offer (IPO) closed today with a subscription rate of 2.37 times, primarily driven by solid demand from qualified institutional buyers (QIBs). Retail individual investors (RIIs) showed limited interest, subscribing to only 50% of the available shares.
The IPO, which was entirely an offer for sale (OFS) of 14.2 crore shares by Hyundai Motor Global, attracted over 23.63 crore consolidated share bids against 9,97,69,810 shares available for subscription. QIBs oversubscribed their quota by 6.97 times, while non-institutional investors subscribed to only 60% of their reserved shares.
Although the IPO proceeds will go entirely to the selling shareholder, Hyundai Motor Global, the management has indicated that the funds will be utilized for research and development and to support the development of new innovative offerings.
Hyundai IPO GMP & Price Band
Hyundai India’s grey market premium (GMP) has declined to 0, signaling a stagnant or negative listing price trend. The GMP has shown a consistent decrease since the issue began. Its peak GMP reached approximately INR 570 per share.
The company has set a price band of INR 1,865-1,960 per share, allowing investors to bid for 7 shares in one lot.
Hyundai India IPO Review
Hyundai’s IPO has garnered positive recommendations from analysts, who emphasize the company’s strong brand presence in India and its favorable position to capitalize on growth opportunities in the passenger car market for the long term.
ICICI Direct has assigned a “subscribe” rating to Hyundai, citing steady growth prospects, robust financials, and a strong SUV product lineup. They anticipate healthy double-digit portfolio returns over the medium to long term, despite expecting limited listing gains from the IPO.
Anand Rathi has recommended a “Subscribe – Long Term” rating for the IPO, noting that the company is valued at 26.2 times its FY24 earnings at the upper band. They believe the issue is fully priced and foresee long-term potential.
For the quarter ending June 2024, Hyundai Motor India reported a revenue of INR 17,344 crore, with 76% from the domestic market and 24% from exports. The net profit for the quarter stood at INR 1,489.65 crore.
Kotak Mahindra Capital, Citigroup Global, HSBC Securities, JP Morgan, and Morgan Stanley are the book-running lead managers, while KFin Technologies is the registrar to the offer.
The Hyundai India IPO seems to have attracted strong demand from qualified institutional buyers, but retail individual investors showed limited interest. The decline in the grey market premium (GMP) to 0 indicates a stagnant or negative listing price trend, which may concern potential investors. However, analysts have given positive recommendations for the IPO, citing the company’s strong brand presence in India and its potential for long-term growth in the passenger car market. ELCTRIK Speaks
