Hyundai Motor Company of South Korea will get the entire proceeds of Rs 27,870 crore ($3.3 billion).
The much-anticipated initial public offering (IPO) of Hyundai Motor India Ltd (HMIL) has made headlines as the largest-ever share offering in the history of the Indian capital market. With a staggering ₹27,870 crore ($3.3 billion) on the line, the IPO closed on October 17, 2024, with an impressive subscription rate but notable challenges in attracting retail investors. Here’s a deep dive into the IPO’s details, the investor landscape, and what lies ahead for Hyundai Motor India.
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Overview of the Hyundai Motor India IPO
Hyundai Motor India, India’s second-largest car manufacturer, launched its IPO to raise funds primarily through an Offer for Sale (OFS) of up to 14.21 crore equity shares, priced between ₹1,865 and ₹1,960 per share. This move comes as part of the company’s strategy to reduce promoter holdings while allowing investors to partake in the company’s growth.
Subscription Details
The IPO garnered significant attention, with a total subscription of 2.37 times during the bidding period from October 15 to October 17. In numbers, this translates to bids for approximately 23.63 crore shares against an offering of 9.97 crore shares. Qualified Institutional Buyers (QIBs) demonstrated overwhelming interest, subscribing 6.97 times their allotted quota. However, the retail portion, which was designed to cater to individual investors, saw a lackluster response, being undersubscribed at only 50%.
Breakdown of Subscription Categories
- Qualified Institutional Buyers (QIBs): 6.97 times their quota
- Non-Institutional Investors (NIIs): 60% subscription
- Retail Individual Investors (RIIs): 50% subscription
The contrasting response between institutional and retail investors raises questions about market sentiment towards Hyundai and the automotive sector.
Factors Influencing Investor Sentiment
Despite the strong interest from institutional buyers, the muted response from retail investors can be attributed to several key factors:
High Valuation Concerns
Investors expressed apprehension regarding the high valuation of Hyundai Motor India. With the IPO price range set above ₹1,800 per share, many retail investors felt that the stock was overpriced, especially in light of the company’s financial performance and market conditions.
Weak Demand in the Auto Sector
The overall demand for passenger vehicles, particularly in the SUV segment—Hyundai’s focus area—has experienced a downturn. The SUV segment, which previously enjoyed double-digit growth, is now seeing single-digit growth, further dampening retail investor enthusiasm.
Previous IPO Performance
Historical performance of large IPOs also played a role in shaping investor sentiment. Concerns about disappointing post-listing performances, particularly from large issues, led many retail investors to adopt a cautious stance.
Dividend Payments and Perceived Promoter Aggression
The recent ₹10,782 crore dividend paid to Hyundai Motor Company (HMC) also left a sour taste for potential investors. Analysts noted that such large dividend payouts before an IPO might suggest that the company is less committed to returning value to new investors.
Checking the Hyundai Motor India IPO Allotment Status
As the subscription period has concluded, investors eager to know their allotment status can check it via the following platforms:
National Stock Exchange (NSE)
- Visit the NSE IPO allotment status portal.
- Log in using your credentials or sign up if you’re a new user.
- Select ‘Hyundai Motor India.’
- Enter your PAN and IPO application number, then click ‘submit.’
Bombay Stock Exchange (BSE)
Investors can also verify their allotment status on the BSE official website.
KFin Technologies
- Go to the KFin Technologies IPO allotment status page.
- Choose ‘Hyundai Motor India IPO’ from the dropdown menu.
- Fill in your application number, DP/Client ID, or PAN and submit to view your status.
Future Outlook for Hyundai Motor India
Looking ahead, Hyundai Motor India is set to list its shares on the NSE and BSE on October 22, 2024. Successful applicants will have their shares credited to their Demat accounts by October 21, while refunds for unsuccessful applications will be processed simultaneously.
Market Position and Growth Potential
As the second-largest player in India’s automotive sector, Hyundai’s strategic decisions post-IPO will be crucial for its growth trajectory. The company must navigate the current challenges in the automotive market while leveraging its strong brand reputation and innovation capabilities to boost sales and investor confidence.
Final Thoughts:
The Hyundai Motor India IPO stands as a significant event in the Indian capital markets, reflecting both the excitement and caution of investors. While institutional demand has been robust, retail investors have raised valid concerns that the company must address to ensure long-term growth and satisfaction among all stakeholders. As the dust settles post-listing, Hyundai will need to focus on performance and transparency to reassure investors and secure its position in a competitive market landscape.
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