Hyundai Motor India IPO debuts at Rs.1934.
In a landmark event for India’s automobile industry, Hyundai Motor India Ltd. (HMIL) made its debut on the stock exchanges with a Rs 27,870 crore Initial Public Offering (IPO), the largest in the country’s history. Despite the hype, the shares opened at Rs 1,934 on the National Stock Exchange (NSE), slightly below the issue price of Rs 1,960, marking a 1.3% drop on listing day.
Key Highlights:
- Hyundai Motor India raised Rs 27,870 crore through its IPO, listing at Rs 1,934 on NSE.
- The IPO was oversubscribed 2.37 times, despite a slow start from retail investors.
- Hyundai diluted a 17.5% stake in its Indian unit, marking India’s largest carmaker IPO in two decades.
Historic Hyundai Motor India IPO
This IPO represents Hyundai’s significant move in the Indian market, where the South Korean automaker enjoys the position of being the second-largest car manufacturer. The company sold a 17.5% stake in its wholly-owned Indian unit through the IPO, which is notable for being the first offering by a carmaker in India in more than two decades. The last similar event occurred with Maruti Suzuki’s listing in 2003.
Despite slow interest from retail investors during the initial subscription period (October 15-17), strong demand from qualified institutional buyers on the final day pushed the IPO to an oversubscription rate of 2.37 times. This surge helped Hyundai secure its spot as the leader of India’s largest IPO, surpassing the Life Insurance Corporation’s (LIC) Rs 21,000 crore IPO in 2022.
Hyundai Motor India IPO Details and Market Position
Hyundai Motor Company, the parent organization of Hyundai Motor India, raised Rs 8,315.28 crore from 225 anchor investors before the official listing. The company allocated 4.2 crore equity shares to these investors at Rs 1,960 per share. It’s important to note that the IPO was a pure offer for sale, meaning none of the proceeds will directly benefit the Indian subsidiary. Instead, it allowed the South Korean parent company to divest its holdings.
India plays a crucial role in Hyundai’s global operations, contributing approximately 14% of the company’s total sales. This fact was emphasized by Hyundai Motor Group’s Executive Chair, Euisun Chung, who highlighted the importance of the Indian market during the listing ceremony, stating, “Today’s listing shows that HMIL is a key part of India. It demonstrates our commitment to this great nation and ensures that our shareholders and HMIL will continue to grow together.”
Future Prospects
The success of Hyundai’s IPO reflects the rising investor confidence in India’s auto sector, particularly as the country continues to emerge as a significant player in the global automobile market. Hyundai’s decision to go public marks a new chapter in its growth trajectory, positioning it for further expansion and shareholder engagement in one of its most crucial markets.
Major financial institutions, including Kotak Mahindra, Citi Group, HSBC Securities, JP Morgan, and Morgan Stanley, were the lead managers for this historic IPO, facilitating Hyundai’s public market debut.
Conclusion
Hyundai Motor India’s IPO is a historic event, showcasing the company’s strong presence in the Indian market and its growth potential. Although the stock debuted slightly below the issue price, investor interest, particularly from institutional buyers, signals confidence in Hyundai’s long-term prospects in India. As the third-largest market for Hyundai globally, India will likely continue to play a pivotal role in the automaker’s future endeavors.
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