Hyundai Motor India has set a price band of ₹1,865 to ₹1,960 per share for its highly anticipated IPO, which aims to raise approximately ₹27,870 crores (about $3.35 billion). This IPO is notable as it will be Hyundai’s first public offering outside South Korea and marks the first IPO by a car manufacturer in India since Maruti Suzuki’s offering in 2003.
Key Details of the IPO
- Offer Structure: The IPO will consist entirely of an offer for sale, meaning Hyundai Motor will not issue any new shares; instead, it will sell a portion of its existing equity to the public. The offering includes up to 14.22 crore equity shares, representing a 17.5% stake in the company.
- Subscription Dates: The IPO will open for subscriptions from October 15 and will close on October 17. Anchor investors will have the opportunity to participate a day earlier, on October 14.
- Lot Size and Discounts: Investors can bid for shares in multiples, with a minimum lot size of 7 shares. Additionally, there is a ₹186 discount for eligible employees applying through the employee reservation portion, which includes up to 778,400 equity shares.
- Investor Categories: The shares will be allocated with a structure favoring various categories: up to 50% for qualified institutional buyers (QIBs), a minimum of 15% for non-institutional investors (NIIs), and at least 35% reserved for retail investors.
- Price-to-Earnings Ratios: The price-to-earnings (P/E) ratio at the upper end of the price band is estimated at 26.28 times the diluted EPS for the financial year 2024, while the lower end stands at 25.01 times. This is slightly above the average industry P/E ratio of around 23.57 times.
Strategic Implications
Hyundai’s move to list in India aligns with its strategy to strengthen its market presence amid increasing competition from domestic rivals like Maruti Suzuki and Tata Motors. The funds raised from the IPO are expected to support the expansion of Hyundai’s SUV lineup and enhance its production capabilities.
The anticipated listing has generated considerable interest in the market, given the robust performance of Hyundai in recent years. The company has been a leader in the Indian automotive sector, known for its innovative designs and quality manufacturing.
Market Trends and Expectations
Market analysts are closely watching Hyundai’s IPO for several reasons:
- Growth Potential: As one of the top car manufacturers in India, Hyundai has demonstrated significant growth, especially in the SUV segment, which is currently booming in India.
- Investor Sentiment: Given the challenging market conditions and the relatively low number of recent IPOs, Hyundai’s offering is expected to attract strong interest from both institutional and retail investors.
- Comparative Analysis: The last IPO in this sector was Maruti Suzuki’s in 2003, making Hyundai’s IPO a landmark event. Investors may see this as a signal of recovery and confidence in the automotive market.
Conclusion
Hyundai Motor India’s upcoming IPO is poised to be a significant event in the Indian stock market, reflecting the company’s strategic growth plans and the positive trajectory of the Indian automotive sector. With a well-structured offering and a competitive price range, the IPO is likely to attract considerable interest from investors looking to capitalize on the expanding automotive market in India.
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