The grey market premium (GMP) of India’s largest initial public offering (IPO) from Hyundai Motor India has fallen to 1% or Rs 17 on the final day of the bidding process. The issue has been subscribed at 51% so far.

Strong demand has come from qualified institutional buyers (QIBs), who have subscribed to 80% of the issue, followed by retail investors at 42% as of around 10:45 AM on Thursday.

Meanwhile, non-institutional investors (NIIs) have subscribed to 30% of the issue, placing bids for approximately 63.83 lakh shares against the 2,12,12,445 shares reserved for them.

The issue is entirely an offer for sale (OFS) of 14.2 crore shares, which will be offloaded by the company's parent, Hyundai Motor Global. Since the IPO is an OFS, all proceeds will go to the selling shareholder.

Even though all proceeds from the IPO will go to the parent company, management stated that funds will be used for research and development and new innovative offerings.

Hyundai IPO Price Band
The company has set a price band of Rs 1,865-1,960 per share, with investors able to bid for 7 shares in one lot.

Hyundai India IPO Review
Most analysts recommend investors subscribe to the IPO for the long term, noting that the company has a strong brand presence in India and is well-positioned to capture growth opportunities in the passenger car market.

"We assign a subscribe rating to Hyundai, given steady growth prospects amid industry tailwinds, robust financials, and a healthy SUV product slate. We expect limited listing gains from this IPO, but anticipate the company will deliver healthy double-digit portfolio returns over the medium to long term," said ICICI Direct.

"At the upper band, the company is valued at 26.2 times its FY24 earnings and 26.7 times if we annualize FY25 earnings. We believe the issue is fully priced and recommend a Subscribe – Long Term rating for the IPO," stated Anand Rathi.

Other Details
Hyundai is the second-largest carmaker in India, with a portfolio of 13 passenger vehicle models across sedans, hatchbacks, and SUVs. The company aims to leverage its strong local manufacturing capabilities to establish itself as Hyundai Motor's largest production base in Asia.

It operates two production facilities in Chennai, with a combined installed capacity of 8.24 lakh units per annum, currently running at over 90% capacity utilization.

For the quarter ending June 2024, Hyundai Motor India reported revenue of Rs 17,344 crore, up from Rs 16,624 crore in the same period last year. Of this revenue, 76% was derived from the domestic market, while exports accounted for 24%.

The company's net profit for the quarter stood at Rs 1,489.65 crore, compared to Rs 1,329.19 crore in the previous year.

Kotak Mahindra Capital, Citigroup Global, HSBC Securities, JP Morgan, and Morgan Stanley are the book-running lead managers for the issue, while KFin Technologies is the registrar to the offer.