Hyundai Motor India IPO: Public Issue Subscribed 28% On Day 2, GMP Hints Tepid Listing; Check Details

Hyundai Motor India Limited, the auto giant and leading player in India's passenger vehicle market has launched its highly anticipated initial public offering (IPO). The public issue, which opened yesterday, has created quite a buzz in the Indian stock market. The Hyundai Motor India IPO is open for bidding from Tuesday, 15th October, and will close on Thursday, 17th October 2024. Investors have until then to participate in this massive Rs 27,870.16 crore public issue.

The Hyundai Motor India IPO is entirely an offer for sale (OFS), meaning the net proceeds from the IPO will not be added to the company's balance sheet. Instead, existing shareholders are offloading their stakes. The company has set a price band of Rs 1,865 to Rs 1,960 per equity share for the IPO, and investors can apply for shares in lots, with each lot containing seven shares.

According to market observers, Hyundai Motor India shares are currently commanding a grey market premium (GMP) of Rs 65. While the GMP is not a definitive predictor of the IPO's performance, it provides an early indication of market sentiment.

Hyundai Motor India IPO Subscription Status
As of 3:03 pm on the second day of bidding, the Hyundai Motor India IPO had been subscribed 28%, as per BSE data. Investors have bid for 2,76,53,633 shares against the 9,97,69,810 shares on offer.

Breaking it down by investor category:
Retail investors have subscribed to 37% of their portion of the IPO.
Non-institutional investors (NIIs) have subscribed to 22%.
Qualified institutional buyers (QIBs) have shown a more conservative approach so far, with 14% subscription.
The employee portion has been subscribed 1.25 times.
At the close of day one, the overall IPO had been subscribed to 18%, with retail investors leading the way at 6%, followed by NIIs at 13%, and QIBs at 5%.

Here's a quick snapshot of the key information potential investors should know:
IPO Price Band: The price band for Hyundai Motor India IPO has been fixed between Rs 1,865 to Rs 1,960 per equity share.

IPO Size: The public issue aims to raise Rs 27,870.16 crore. However, since this is an OFS, the proceeds will go to the selling shareholders rather than being used for company expansion or debt reduction.

IPO Dates: The IPO opened on 15th October and will close on 17th October 2024. Investors can place their bids between 10:00 am and market close on these dates.

Lot Size: Investors can bid in lots of seven shares each. The minimum investment would be Rs 13,055 (for one lot at the lower end of the price band).

GMP: As of now, Hyundai Motor India shares are available at a premium of Rs 65 in the grey market, indicating positive sentiment ahead of the listing.

IPO Allotment Date: The likely allotment date for the IPO shares is 18th October 2024, with refunds expected for unsuccessful applicants soon after.

Listing Date: The shares are expected to debut on the BSE and NSE on 22nd October 2024.

IPO Registrar: KFin Technologies has been appointed as the official registrar for the IPO, handling allotments and refunds.

Lead Managers: A consortium of reputed financial institutions, including Kotak Mahindra Capital, Citigroup Global Markets, HSBC Securities, JP Morgan, and Morgan Stanley, are managing the IPO process.

Should You Apply?
Hyundai Motor India has long been a dominant player in the Indian auto market, known for its popular models like the Creta, Venue, and i20. With a strong foothold in the passenger vehicle segment, the company is well-positioned for growth. Analysts are optimistic about the company's future, especially with its focus on expanding its electric vehicle (EV) portfolio and maintaining leadership in the premium passenger vehicle market.

Master Capital, an investment firm, has recommended a "buy" rating for the IPO, citing Hyundai's robust market position, commitment to expanding its product lineup, and focus on capital efficiency. The brokerage notes, "Hyundai Motor India's growth prospects in the EV space and premiumization of its passenger vehicle portfolio are positive indicators for long-term investors. While the issue is fully priced, long-term investors could consider adding it to their portfolio."

However, investors should note that the IPO proceeds won't directly benefit Hyundai's business as it is an OFS. Therefore, the decision to invest should be driven by confidence in the company's market position and growth strategy, rather than immediate financial gains.