Hyundai Motor India IPO: Who Can Invest How Much In India's Largest IPO

The Hyundai Motors India Ltd. initial public offering will open on Oct. 15. India's second largest passenger car maker is coming out with a $3.3-billion book-build issue, the biggest seen by the country so far.

The Rs 27,870 crore IPO at the upper end of the price band of Rs 1,865-1,960 a piece will involve four key classes of investors. Each will have to pitch in money in the IPO to ensure it is fully subscribed or oversubscribed.

The Creta SUV maker, will allocate 50% of the issue to qualified institutional buyers, and 15% to non-institutional buyers, including two classes of investors — small high net-worth individuals with bids between Rs 2–10 lakh and large investors above Rs 10 lakh. And finally, the retail Investors which will have to subscribe 35% of the issue.

There are four main actors in this IPO:

• Foreign portfolio investors

• Mutual funds

• High net-worth individuals

• Retail investors

They will have to subscribe a minimum of 37.5% of the net issue. This comes to Rs 10,451 crore, or $1.24 billion, out of the total issue size.

The domestic investor will play a big role in the Hyundai India IPO. Mutual funds can invest a minimum of 12.5% in the issue that amounts to Rs 3,484 crore, or $415 million.

The IPO reserves 35% of the issue for the retail category. This amounts to Rs 9,755 crore, or $1.16 billion. This means it will need 4.87 lakh retail applications for the full amount for this portion to the fully subscribed. If retail investors apply in single lots, which comprises of 7 shares, then the portion will remain undersubscribed.

A retail applicant at maximum permissible limit can apply for 14 lots, worth up to Rs 1.92 lakh.

Only 15% of the issue has been reserved for this category, which has been further divided into two. The Small-NII that can invest between Rs 2 lakh and Rs 10 lakh, and the B-NII that can invest Rs 10 lakh or more.