Hyundai Motor India Ltd., a prominent player in the automotive industry, is gearing up to launch its initial public offering (IPO) on October 15, 2024. This IPO is poised to be the largest in India's history, with the company aiming to raise a staggering ₹27,856 crore (approximately $3.3 billion) through this significant financial maneuver.

The Indian unit of the South Korean automotive giant plans to sell its shares in the price range of ₹1,865 to ₹1,960 per share, making it a hot topic among investors and market analysts alike. As anticipation builds for this monumental offering, it's essential to take note of the latest developments surrounding Hyundai Motor India’s IPO, particularly the grey market premium (GMP), which has seen a dramatic decline.

Recent data indicates that the grey market premium for Hyundai Motor India's shares has plummeted by over 50% in the last week, currently standing at ₹140 as of October 11. This decline raises questions about investor sentiment and market dynamics leading up to the IPO. Grey market activities often provide insight into potential IPO performance, and the significant drop in premium could suggest a shift in investor confidence or market conditions.

The IPO will be a complete Offer For Sale (OFS), with Hyundai's parent company selling 14.2 crore shares, accounting for 17.5% of the total equity. Investors interested in participating can bid for a minimum lot of seven shares, with the option to purchase additional lots thereafter. This structure aims to attract a wide range of investors, from retail to institutional, enhancing the IPO's appeal.

The three-day public offer will open for subscription on October 15 and close on October 17. Notably, a portion of the issue has been reserved for various investor categories: 50% for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors. This allocation strategy reflects Hyundai Motor India's intent to attract a diverse investor base, ensuring broad participation in this historic offering.

Among the notable participants in this IPO are global investment firms like BlackRock Inc. and Singaporean sovereign wealth fund GIC Pte, which have shown keen interest in acquiring stock in Hyundai Motor India's IPO. The anchor book for this IPO has already been fully allocated, with half of the shares going to domestic institutions and the other half to international investors. This strong backing from institutional investors bodes well for the IPO's success.

Hyundai Motor India is not just a leading manufacturer; it holds the title of the second-largest original equipment manufacturer (OEM) in the country and is also the second-largest exporter of passenger vehicles. The company commands a domestic market share of 14.6%, showcasing its significant presence in the Indian automotive landscape.

In September 2024, Hyundai sold 64,201 units, marking a 10% decline year-on-year. For the current fiscal year, the company has sold 5.77 lakh units, maintaining flat growth compared to the previous year. This performance highlights the competitive challenges faced by Hyundai Motor India, but the upcoming IPO represents a strategic move to bolster its financial capabilities and enhance its market positioning.

For eligible employees bidding in the IPO, Hyundai Motor India is offering a discount of ₹186 per share, further incentivizing participation from within the company. The shares will carry a face value of ₹10 each, and the pricing structure aims to balance investor interest with the company's funding requirements.

In conclusion, Hyundai Motor India is on the verge of a historic IPO, one that could redefine the landscape of initial public offerings in the country. With a comprehensive strategy to attract diverse investors and significant institutional backing, this IPO is set to be a landmark event in the Indian capital market. Investors should keep a close eye on this offering as it unfolds and consider the implications it may have on Hyundai's growth trajectory.

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