New Delhi: The initial public offering (IPO) of Hyundai Motor India Ltd., which commenced on October 15, is set to conclude today, October 17. As of the end of Day 2, the overall subscription stood at 42%, with varying interest from different investor categories.
Subscription Details:
1.89 million shares against an offer of around 4.95 million shares.
Non-Institutional Investors (NIIs): This category recorded a subscription of 26%, indicating lower demand compared to retail investors.
Qualified Institutional Buyers (QIBs): The QIB portion was more robust, achieving a subscription rate of 58%. This reflects strong interest from institutional investors, who bid for about 16.3 million shares out of the available 28.3 million.
Employee Quota: The employee segment, which offers a discount of ₹186 per share, has been subscribed 1.31 times.
The IPO features a price band set between ₹1,865 and ₹1,960 per share, aiming to raise ₹27,870 crore. This would make it the largest IPO in India, surpassing the previous record held by LIC’s ₹21,000 crore offering.
Grey Market Premium (GMP)
In the grey market, shares are currently trading at a premium of ₹17, translating to an approximate listing price of ₹1,977 if the trend continues. However, this represents a significant decline from earlier highs where the GMP reached up to ₹570. Analysts note that the declining GMP suggests tepid demand for the IPO.
Market Outlook
Despite the current subscription figures, analysts generally recommend subscribing to the IPO based on Hyundai’s solid growth potential and healthy financial standing. They emphasize that this investment may be more suitable for long-term investors rather than those seeking quick returns.
Hyundai Motor India holds a substantial position in the market as the second-largest original equipment manufacturer (OEM) and exporter of passenger vehicles in India, boasting a domestic market share of 14.6%. However, recent sales figures show a decline; September sales were down by 10% year-on-year, totaling 64,201 units.
The allotment process for shares will be finalized on October 18, with a tentative listing date on BSE and NSE set for October 22, 2024. The IPO is managed by several leading financial institutions including Kotak Mahindra Capital Company Ltd., HSBC Securities & Capital Markets Pvt. Ltd., and JP Morgan India Private Ltd., among others.
