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Hyundai Motor India Ltd., a subsidiary of the South Korean automotive giant, is poised to make its debut on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on Tuesday, October 22nd. The much-anticipated Initial Public Offering (IPO) has generated considerable buzz in the market, with positive signals indicating potential gains for investors. The grey market premium (GMP), a measure of the price difference between the unlisted shares and the issue price, has shown a remarkable turnaround, rising from a negative 2% last week to a positive 4.85%, signaling a potential listing gain of around 5% for investors on Tuesday.
The IPO, which concluded its public subscription period between October 15th and 17th, attracted a significant response, garnering a 2.37 times subscription. While the retail (0.50 times) and non-institutional investor (0.60 times) quotas were oversubscribed, the Qualified Institutional Buyer (QIB) category received the highest subscription (6.97 times), driving the overall subscription numbers. The Rs 27,870.2-crore IPO, a complete offer-for-sale (OFS) where Hyundai Motor's South Korean parent will be diluting its stake, garnered bids for 23,63,26,818 shares against the 9,97,69,810 shares on offer.
Hyundai Motor India's IPO has surpassed LIC's Rs 21,000-crore IPO, previously the largest in India's history, to become the country's biggest IPO. The price band for the IPO was set between Rs 1,865 and Rs 1,960 per share. The GMP, a barometer of market sentiment, has witnessed a volatile trajectory, falling from Rs 175 on October 9th to just Rs 5 on the final day of bidding on Wednesday, October 17th. However, a day before the listing, the GMP experienced a sharp recovery, reaching Rs 95, indicating investor optimism and a strong listing potential.
Hyundai Motor India's entry into the Indian market in 1996 with the iconic Santro hatchback marked the beginning of its journey in India. Currently holding the second position in India's automotive market, the company boasts a 15% market share and sold 614,721 cars domestically and exported 163,155 units in the year ending March 2024. With a factory in Chennai, dubbed the 'Detroit of Asia', operating at 94% utilization rate, Hyundai is focusing on expanding its production capacity. The acquisition of a former General Motors plant in Maharashtra, slated to begin operations in the second half of 2026, will enable Hyundai to achieve its goal of producing about 1 million units annually.
The company's extensive dealer network, encompassing 1,377 dealerships across India, caters to a diverse customer base. Popular models like the 'Creta' and 'Venue' sport utility vehicles and the 'Grand i10 Nios' hatchback contribute significantly to Hyundai's success in the Indian market. The Chennai plant also serves as a key export hub, manufacturing cars that are shipped to South Africa, the Middle East, and Latin America. Leading investment banks such as Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital, and Morgan Stanley are advising on the transaction, while law firm Shardul Amarchand Mangaldas is serving as the company counsel. Cyril Amarchand Mangaldas is the banks' counsel, and Latham and Watkins is acting as the international counsel.
Source: Hyundai Motor India IPO Listing Tomorrow: GMP Turns Positive, Indicates 5% Gains on Tuesday