Hyundai Motor India IPO: Institutions Could Play Big Role As Auto Major Debuts On D-Street

India's second largest passenger car maker priced its IPO between Rs 1,865 and 1,960 per share, finally pricing at the upper end of the price band.

The offer for sale by the Korean parent saw 17.50% of the equity being placed in the IPO, which raised Rs 27,870 crore for the parent.

The overwhelming demand from qualified institutional investors saw them subscribe 75.6% of the IPO against the allocated 50%.

Of the total shares offered in the IPO (17.5% stake), freely available shares amount to 12.28% of the company or 9.97 crore shares. Freely held shares by institutions stood at 8.01% or 6.51 crore shares. FPIs in total held 7.36% of the company, of which 4.5% stake is freely available for trade on Tuesday.

Mutual funds, which also received the unsubscribed portion of the retail and NII segment, held 3.83% stake in the company. Freely available shares stood at 1.65 crore shares or 2.03% of the company. The QIB portion led by FPIs and MF was subscribed 6.97 times in the IPO.

It is likely that any float that comes into the market will be absorbed by these institutions, if retail and NIIs decide to offload their shares.

The retail and NIIs portion was allocated 24.4% of the issue or 4.26% of the equity.

The likelihood of liquidity in the market if institutions decided not to sell at this moment will be low leading to price activity in the share.

Hyundai Motor India is the first automaker to list in two decades. The successful IPO of the Korean automaker in India could pave the way for other multinational companies to look at Indian liquidity pool. Foreign subsidiaries with India operations enjoy much higher valuations than their foreign parents.