Key Highlights
Hyundai Motor India is set to launch the country’s largest-ever initial public offering (IPO) on October 15, 2024. The highly anticipated IPO aims to raise up to Rs 27,856 crore, making it the biggest offering in the history of the Indian stock market. As a subsidiary of the South Korean automotive giant Hyundai Motor Company, this IPO represents a significant milestone for both the company and the broader Indian market.
IPO Details: Price Band and Subscription Dates
The Hyundai Motor India IPO will open for subscription on October 15 and close on October 17. The price band for the shares is set between Rs 1,865 and Rs 1,960 per share. Retail investors can participate by applying for a minimum lot size of seven shares, which requires a minimum investment of Rs 13,720 at the lower end of the price band. This IPO is structured as an offer for sale (OFS) by the parent company, meaning that Hyundai Motor Company in South Korea will offload up to 14.21 crore shares. The Indian entity itself will not receive any proceeds from the share sale.
Allocation and Listing
The IPO has a well-defined allocation structure, with 50% of the shares reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors. Additionally, there is a reservation for eligible employees, who will receive a discount of Rs 186 per share. The allotment of shares is expected to be finalized by October 18, with the shares likely to list on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on October 22, 2024.
Significance of the Hyundai IPO
The Hyundai Motor India IPO is significant not only for its record size but also for its potential impact on the Indian stock market. The offering is poised to enhance the liquidity and market visibility of the company, which is already a major player in India’s automotive sector. Hyundai Motor India is known for popular models like the Creta, Verna, and the electric SUV Ioniq 5, and it holds a substantial market share, being the second-largest car manufacturer in India after Maruti Suzuki.
The IPO’s timing comes amid a resurgence of interest in the Indian automotive industry, driven by rising demand for electric vehicles (EVs) and advanced automotive technologies. Analysts believe that Hyundai’s strong market presence and robust product lineup will attract significant interest from institutional and retail investors alike.
Financial Performance and Market Position
Hyundai Motor India has demonstrated solid financial performance, with a net profit of Rs 6,060 crore for the fiscal year ending March 2024 and revenues of over Rs 71,300 crore. For the quarter ending June 2024, the company reported a net profit of Rs 1,489 crore on revenues of Rs 17,567 crore. These strong results, coupled with the company’s extensive dealership and service network across India, underline Hyundai’s strategic importance in the domestic market.
The IPO will give Hyundai Motor Company a market valuation of approximately Rs 1.6 lakh crore at the upper price band. This valuation reflects the company’s dominance in India’s passenger vehicle market and its potential for growth in the EV segment.
What This Means for Investors
The Hyundai IPO is generating substantial interest due to its potential for long-term returns and the opportunity to invest in a well-established automotive brand. Given its scale and the structured allocation of shares, it is expected to attract a diverse range of investors, from retail participants to large institutional buyers. Investors should note that the funds raised through this IPO will go directly to the parent company in South Korea, rather than being used for expanding Hyundai Motor India’s operations.
A Historic Moment for India’s Stock Market
The Hyundai Motor India IPO is more than just a share sale; it is a landmark event that reflects the growing importance of the Indian market within the global automotive industry. As the subscription period approaches, both analysts and investors are keeping a close eye on market conditions and investor sentiment. With its massive size and strategic importance, the Hyundai IPO is expected to make a lasting impact on Dalal Street.
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