Hyundai India IPO gets 2.4x subscription as institutional investors drive in

Hyundai Motor India's highly anticipated Initial Public Offering (IPO) subscription concluded on Thursday, drawing subscriptions 2.37 times the number of shares on offer.

The three-day subscription, which started on Tuesday, saw tepid investor interest in the first two days. However, a strong demand from Qualified Institutional Buyers (QIBs) on the final day ensured the successful completion of the issue.

The issue received 23.63 crore bids for the total 9.98 crore shares offered at a price band of Rs. 1,865 – Rs. 1,960, according to the data available on the stock exchanges.

The portion set aside for retail investors was subscribed 0.5 times with 2.50 crore bids for 4.95 crore shares offered. The QIB portion was subscribed 6.97 times with 19.72 crore bids for 2.83 crore shares offered.

The employee portion was subscribed 1.74 times with 13.57 lakh bids for 7.78 lakh share offered. The non-institutional investors’ part was also subscribed just 0.6 times with 1.28 crore bids for 2.12 crore shares offered.

The IPO will be the largest in the country to date, surpassing Life Insurance Corp’s Rs 21,000-crore IPO two years ago. This will also be the first IPO by a carmaker in India in the two decades since Maruti Suzuki's listing in 2003.

However, Hyundai India's IPO subscription data highlights a lackluster response from retail investors, falling short of expectations. This issue is likely to have seen the lowest retail subscription among the recent major IPOs.

The IPO is a pure offer for sale. None of the proceeds of the issue will come to the Indian unit. The South Korean parent company Hyundai Motor Company is selling up to 17.5% stake in its wholly-owned India unit.

The automaker raised Rs 8,315.28 crore from 225 anchor investors on Monday. It finalized the allocation of 4.2 crore equity shares to anchor investors for Rs 1,960 per share.

Hyundai Motor Company is expected to dilute an additional 7.5% stake in Hyundai India over the next three to five years to adhere to the minimum public shareholding guidelines set by the Indian market regulator Securities and Exchange Board of India.