Hyundai Motor India IPO's Day Two Sees Sluggish Demand With Only 27% Subscribed So Far

Hyundai Motor India Ltd.'s initial public offering opened for subscription for the second day on Wednesday. The IPO has been subscribed 0.27 times the offer so far on the second day. It was subscribed 18% on the first day.

The company has set a price band of Rs 1,865–Rs 1,960 per share for its three-day IPO, which is a pure offer for sale of 14.2 crore shares.

The company aims to raise up to Rs 27,870 crore, making it India’s biggest IPO, surpassing Life Insurance Corp.'s Rs 21,000 crore offer in 2022.

The minimum application lot size is seven shares.

Ahead of the IPO, Hyundai Motor India raised Rs 8,315 crore from anchor investors on Monday. It allotted 4.24 crore shares at Rs 1,960 apiece to 225 anchor investors.

Chief Operating Officer Tarun Garg explained how the IPO marks the second phase of Hyundai Motor India's growth story, presenting opportunities for both local and global investors. "We are the second-largest player in the passenger vehicle segment in India, and this IPO is a key milestone in our growth journey,” he said.

• Issue opens: Oct. 15.

• Issue closes: Oct. 17.

• Price band: Rs 1,865 to Rs 1,960 per share.

• Offer for sale: Rs 14.2 crore shares.

• Total issue size: Rs 27,870 crore.

• Bid lot: 7 shares.

• Listing: BSE and NSE. 

• Qualified Institutional Buyers' share: 50%

• Retail share: 15%

• Non-Institutional Investors' share: 15%

• Maximum bid quantity for QIBs: 14,14,16,296 shares.

• Maximum bid quantity for NIIs: 7,07,08,148 shares.

The company is a part of the Hyundai Motor Group, the third largest auto original equipment manufacturer globally, based on commercial year 2023 sales, according to a Crisil report.

The company's portfolio includes 13 models by body type, which include sedans, hatchbacks, sports-utility vehicles and battery electric vehicles. Hyundai Motor India also manufactures parts, such as transmissions and engines for its own manufacturing and sales.

Its top-five passenger vehicles by sales include Creta, Venue, Exter, i20 and Grand i10 NIOS.

According to the red herring prospectus of the company, it will not receive any proceeds from the offer. The offer proceeds will be received by the promoter selling shareholder after deduction of offer related expenses and relevant taxes.

The Hyundai Motor India IPO has been subscribed 0.27 times or 27% as of 2:35 p.m. on Wednesday.

• Qualified institutional buyers: 0.13 times.

• Non-institutional investors: 0.21 times.

• Retail investors: 0.36 times.

• Employee reserve: 1.23 times.