GMP, Price Band, Issue Size; All You Need To Know

One of the most anticipated Initial Public Offering (IPO) of Hyundai Motor India Limited has hit the primary markets today and it will remain open till October 17. With a market share of nearly 15%, the second-largest automobile manufacturer plans to raise ₹27,870.16 crore. The price band has been fixed between ₹1865 – ₹1960 apiece. Investors should note that the IPO is an Offer For Sale, where the company will be liquidating 14.22 crore shares. In an OFS, promoters of the company sell their shares via stock exchanges. None of the money raised via the OFS will be utilised for the company’s betterment.

What’s the Grey Market Premium (GMP) of Hyundai India?

As per the experts, the GMP of Hyundai India shares are available at a premium of ₹65. However, it already fell by about 89% from the previous high of ₹570.

What’s the subscription status of the Hyundai Motor India IPO?

By 11:09 AM today, the IPO was subscribed by 0.08 times. Retail investors subscribed by 0.18 times, whereas non-institutional investors subscribed by 0.05 times. All together, the listing on the NSE and the BSE will most likely take place on October 22.

Are there any shares reserved for the company’s employees?

Yes, the company has apportioned 778,400 shares for employees at a discount of ₹186 to the issue price.

Who is the registrar of the book build issue?

KFin Technologies is appointed as the registrar of the book build issue.

Who are the lead managers of the IPO?

Lead managers include Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities & Capital Markets Pvt Ltd, J.P. Morgan India Private Limited, and Morgan Stanley India Company Pvt Ltd.

Should You Apply? What do the brokerages have to say?

Gaurav Garg, Research analyst at Lemon Markets gave a ‘subscribe’ tag to the IPO. He said, “Hyundai Motor India’s upcoming IPO is set to be the largest in the country’s history, offering investors a unique opportunity to engage with the second-largest car manufacturer in India. The brand has showcased remarkable operational efficiency, sourcing about 90% of its parts locally. This has significantly contributed to its robust financial performance, highlighted by a revenue CAGR of 19.4% over FY21-24 and an impressive return on capital employed (RoCE) exceeding 50% in FY24. With strong financials and a diverse product lineup, Hyundai presents an attractive long-term investment opportunity, even if initial listing gains may be modest.”

While assigning a ‘buy’ tag to the IPO, Master Capital said, “The company plans on maintaining its strong position by expanding its passenger vehicle portfolio by leveraging its deep understanding of consumer preferences and increasing its EV market share. The company also intends to continue premiumization of its passenger vehicle portfolio and focus on calibrated manufacturing capacity expansion and efficient capital allocation. The issue is fully priced, and Investors interested in the company can invest in the IPO for the long term.”

Shivani Nyati, Head of Wealth at Swastika Investment while giving the ‘apply for long-term’ tag to the issue affirmed ‘potential upside for investors.’

She added, “The IPO is an Offer for Sale (OFS), so the company receives no proceeds. Given the significant size of the IPO, it may not be easy to achieve substantial listing gains. Investors with a long-term perspective and a willingness to accept potential listing challenges may consider applying for the HMIL IPO.”

What do other brokerages have to say about the IPO?

Aditya Birla, Anand Rathi, Arihant Capital Markets, Bajaj Capital, Canara Bank Securities, Cholamandalam Securities, ICICI Direct, IDBI Capital, KR Choksey Securities, Marwadi Shares and Finance, SBI Capital Securities, SMIFS have given a ‘subscribe’ tag.