Hyundai Motor India IPO Day 1: Issue subscribed 20% so far. Key details

Hyundai Motor India's initial public offering (IPO) received a tepid response on the first day as the ₹27,870-crore public issue was subscribed just 18%. As of 10.30 AM on Wednesday, the consolidated subscription stands at 20%.

The Qualified Institutional Buyers(QIBs) quota, with 2,82,83,260 shares on offer, was subscribed 0.05 times or 5%. The Non-Institutional Investors quota was subscribed 16% or 0.16 times, with bids placed for 33,62,037 shares of a total of 2,12,12,445 shares on offer.

The retail quota, with 1,48,81,489 bids placed against 4,94,95,705 on offer, was subscribed 30% or 0.30 times. The employees' category was subscribed 95% or 0.95 times, with 7,39,578 bids placed for 7,78,400 shares on offer. Overall, 2,03,74,641 shares have been bid for against 9,97,69,810 on offer, thus subscribing 0.20 times or 20% so far.

Ahead of the opening of the initial public offering (IPO) on Tuesday, Hyundai raised ₹8,315.3 crore from 225 anchor investors on October 14. The company allotted 4.2 crore equity shares to anchor investors at the upper end of the price band of ₹1,960 per share.

Hyundai Motor India, the country's second-largest carmaker, looks to raise ₹27,870 crore at a valuation of ₹1.59 lakh crore. The issue is entirely an offer for the sale of 14.22 crore shares by Hyundai Motor India’s South Korean parent at a price band of ₹1,865-1,960 per share. Since the public issue is completely an OFS, the company will not receive any proceeds from the IPO. The lot size of the IPO is 7 shares and multiple thereafter. The minimum application amount for retail investors is ₹13,720 for one lot, while the maximum is 14 lots or 98 shares for ₹192,080.

The three-day IPO of Hyundai will close on October 17, 2024. The allotment to eligible applicants is expected to be on October 18, 2024, while the tentative listing date is October 22, 2024.

Hyundai Motor India holds a 14.6% market share in the domestic passenger vehicle (PV) market in Q1FY25, second to Maruti Suzuki, which has a 41% share in this category. It is expanding its production capacity in India with the acquisition of a plant in Talegaon, Maharashtra, which is expected to start operations in H2FY26. The company expects its annual capacity to increase from 824,000 units to 994,000 units by H2 FY26.

"We recommend ‘Subscribe for the long term’. At the upper price band of ₹1960, the issue is priced at 26.3x FY24 P/E and looks reasonably priced compared to Maruti which is trading at 29.8x. We expect HMIL to be a key beneficiary of growth in the PV segment due to its strong presence in the SUV segment," says brokerage Motilal Oswal in its latest IPO note on the company.