The INR 27,870 crore initial public offer (IPO) of Hyundai India ended today with the issue getting subscribed 2.37 times albeit a lackluster turnout from retail individual investors (RIIs). The issue received over 23.63 crore consolidated share bids versus 9,97,69,810 shares available for subscription.

On the final day, retail investors subscribed the issue by just 50% against the quote of 4,94,95,705 shares available for subscription. The IPO sailed through because of strong participation by qualified institutional buyers (QIBs) who booked their quota by 6.97 times. The portion reserved for the qualified QIBs attracted merely 19.72 crore bids against 2,82,83,260 shares reserved for them.

Non-institutional investors subscribed only 60% in the quota 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 GMP
Hyundai India's grey market premium has fallen to 0, indicating a flat or negative listing price. The GMP has been falling consistently over the course of the issue. Its highest GMP was around INR 570 per share.

Hyundai IPO Price Band
The company has set a price band of INR 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 INR 17,344 crore, up from INR 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 INR 1,489.65 crore, compared to INR 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.