Hyundai IPO: Latest GMP, key risks, issue details—10 things investors must know before IPO opens tomorrow

Hyundai IPO: The much-awaited mainboard initial public offering (IPO) of leading auto major Hyundai Motor India will open for subscription in India's primary market on Tuesday, October 15, 2024. Shares of the auto major will hit D-Street on October 22, 2024. The public issue will remain open for bidding for all investor groups until Thursday, October 17, 2024.

The IPO of the Indian subsidiary of South Korea's Hyundai Motor Company is set to become the largest public issue in India, surpassing the Life Insurance Corporation's (LIC) IPO worth ₹21,000 crore, which opened for bidding in May 2022. Hyundai Motor India IPO is also one of Asia’s biggest IPOs recently.

Also Read: Hyundai Motor India IPO: Latest GMP, issue details; should you bet? Experts weigh in

The upcoming IPO will be Hyundai's first stock market listing outside South Korea. It will also mark India's first carmaker to go public in over two decades since Maruti Suzuki India's public issue in 2003. Hyundai Motor India is also the second largest carmaker by sales in India after Maruti Suzuki India.

Hyundai Motor India Company Details

The Hyundai Motor Group, which includes Hyundai and Kia, is the world's third-largest auto original equipment manufacturer (OEM) based on passenger vehicle sales, having sold 7.3 million vehicles in 2023. The South Korean company has been operating in India since 1996. 

Also Read: Hyundai Motor India IPO: Check latest GMP, analyst views, issue details ahead of opening on October 15

Hyundai Motor India primarily manufactures and sells four-wheeler passenger vehicles and parts, such as transmissions and engines, in India and outside India. Currently, the vehicle portfolio includes 13 passenger vehicle models, including sedans, hatchbacks, SUVs, and battery EVs. 

The company provides mobility solutions, operating a network of 1,366 sales points and 1,550 service points across India. Hyundai Motor has been operating in India for over two decades, and is one of the few foreign automotive giants to make a mark here, with US rivals Ford and General Motors failing to crack the local market.

Also Read: Hyundai Motor India IPO: India’s biggest public issue set to open on October 15; Here are 10 things to know from RHP

As of March 31, 2024, the company has sold nearly 12 million passenger vehicles in India through exports. According to a CRISIL report, the Indian arm of the South Korean company has been the second largest auto OEM in the Indian passenger vehicles market in fiscals 2022, 2023, and 2024 and the three months ended June 30, 2024, and also since fiscal 2009 (in terms of domestic sales volumes).
 

Hyundai Motor India IPO: 10 things investors must know before subscribing 
 

1.Hyundai Motor India IPO Key Dates: Hyundai Motor India IPO opens for subscription on Tuesday, October 15 and closes on October 17, 2024. The allocation to anchor investors for the Hyundai Motor India IPO is scheduled for Monday, October 15. Hyundai Motor India IPO will open for anchor investors on Monday, October 14.

Tentatively, Hyundai Motor India IPO basis of allotment of shares will be finalised on Friday, October 18, and the company will initiate refunds on Monday, October 21, while the shares will be credited to the demat account of allottees on the same day following refund. Hyundai Motor India shares will debut on BSE, NSE with tentative listing date fixed as Tuesday, October 22, 2024.

2.Hyundai Motor India IPO Price Band: Hyundai Motor India Limited's IPO price band has been fixed at ₹1,865 to ₹1,960 per equity share with a face value of ₹10. The cap price shall be at least 105 per cent of the floor price and less than or equal to 120 per cent of the floor price. The floor price is 186.50 times the face value of the equity shares, and the cap price is 196.00 times the face value of the equity shares.

3.Hyundai Motor India IPO Lot Size: The minimum lot size for an application is seven shares, which means investors can bid for a minimum of seven shares and in multiples thereof. Tentaively, the minimum amount of investment required by retail investors is ₹13,720.

Also Read: Hyundai Motor India IPO: Price band set at ₹1,865-1,960 per share; check GMP, issue details, more

4.Hyundai Motor India IPO Details: Hyundai Motor India plans to raise around $3.3 billion, or over ₹27,870.16 crore. Hyundai will not issue new shares in the IPO which will involve its South Korean parent selling up to 142,194,700 shares (14.22 crore shares) or a 17.5 per cent of its stake in the wholly owned unit to retail and other investors through the offer for sale (OFS) route. The IPO does not include any fresh issue component.

Hence, the book-built issue is an OFS of 14.22 crore shares with a face value of ₹10 each. After the IPO, the South Korean automaker will still hold an 82.5 per cent stake. If shares are priced at the top end of the range, the IPO effectively values the top automaker at $19 billion or ₹15,954 crore in the country's biggest stock offering this year.

5.Hyundai Motor India IPO Reservation: Half of the net public issue size (the offer less employees' reservation) has been reserved for qualified institutional buyers, of which up to 60 per cent may be allocated to anchor investors. Further, 15 per cent of shares are reserved for non-institutional investors, and the remaining 35 per cent of shares are for retail investors. The company has reserved up to 7,78,400 equity shares for its employees.

Also Read: IPO-bound Hyundai Motor India to invest ₹32,000 crore over next 10 years; develop manufacturing hub for EMs

6.Hyundai Motor India IPO Objectives: The promoter-selling shareholder will receive all offer proceeds after deducting offer-related costs and applicable taxes, which the promoter-selling shareholder will be responsible for paying. The company will not receive any of the offer's proceeds.

7.Lead Manager and Registrar of Hyundai Motor India IPO: The mainboard IPO's book-running lead managers (BLRMs) are Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, JP Morgan India Private Limited, and Morgan Stanley India Company Pvt Ltd, whereas Kfin Technologies Limited is the key issue registrar.

8.Hyundai Motor India IPO Key Risks: Hyundai Motors depends on a limited number of suppliers for parts and materials. Increases in the prices of parts and materials required for its operations could adversely affect its business and results of operations. Any interruption in the availability of parts and materials could adversely impact its operations. The auto major depends on its promoter, Hyundai Motor Company, for operations, parts, and materials.

9.Hyundai Motor India IPO Listed Peers: According to the RHP, the company's listed peers are Maruti Suzuki India (with a P/E of 17.93 as of October 4, 2024), Tata Motors Ltd (with a P/E of 11.36), and Mahindra & Mahindra (M&M) (with a P/E of 29.96).

Also Read: Hyundai Motor India IPO: GMP, price, review, other details. Apply or not as upcoming IPO opens next week?

10.Hyundai Motor India IPO Latest GMP: Hyundai Motor India IPO GMP today is +60. This indicates Hyundai Motor India share price was trading at a premium of ₹60 in the grey market, according to investorgain.com. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Hyundai Motor India share price is indicated at ₹2,020 apiece, which is 3.06 per cent higher than the IPO price of ₹1,960.

According to the latest 15 sessions of grey market activities, the current GMP is at ₹60, indicating a downward trend. The lowest GMP recorded is Re 0, and the highest GMP is ₹570, as per the analysis by experts at investorgain.com. 'Grey market premium' indicates investors' readiness to pay more than the issue price.