Hyundai Motor India’s Upcoming IPO: A Gateway for Non-Institutional Investors
Hyundai Motor India, a subsidiary of the globally recognized Hyundai Motor Group, is gearing up for a significant milestone in its corporate journey with the announcement of its Initial Public Offering (IPO) scheduled for October 15, 2024. As the third-largest automotive original equipment manufacturer (OEM) in the world by passenger vehicle sales in 2023, this IPO is poised to attract considerable attention from investors, particularly non-institutional bidders.
Key Details of the IPO
The IPO will consist of an offer for sale of up to 142,194,700 equity shares by the Promoter Selling Shareholder, Hyundai Motor Company. Notably, Hyundai Motor India will not receive any proceeds from this offering, as the shares being sold are owned by the parent company. The price band for the equity shares is set between INR 1,865 and INR 1,960, making it an attractive investment opportunity for a wide range of investors.
The bidding process will commence with the Anchor Investor Bidding Date on October 14, 2024, and will close on October 17, 2024. This structured timeline allows investors to prepare and strategize their bids effectively.
Allocation Strategy for Non-Institutional Investors
One of the most compelling aspects of Hyundai Motor India’s IPO is its allocation strategy, particularly for non-institutional investors. A minimum of 15% of the Net Offer is reserved for this category, which is further divided into two sub-categories:
- Application Sizes Between INR 200,000 and INR 1,000,000: One-third of the 15% allocation will be available for bidders in this range.
- Application Sizes Above INR 1,000,000: The remaining two-thirds will be allocated to those making larger bids.
This approach ensures that a diverse range of investors can participate, catering to both smaller and larger non-institutional investors. Additionally, any undersubscription in one sub-category may be reallocated to the other, enhancing the chances of successful bids.
Retail Individual Investors and Employee Allocations
In addition to non-institutional investors, retail individual investors will have access to at least 35% of the Net Offer. This allocation will be proportionate, based on valid bids received at or above the offer price. Furthermore, eligible employees of Hyundai Motor India will also be allotted equity shares on a proportionate basis, fostering a sense of ownership and engagement among the workforce.
The Application Process: ASBA
Participation in the IPO, except for Anchor Investors, must be conducted through the Application Supported by Blocked Amount (ASBA) process. This method requires bidders to provide their bank account details or UPI ID for UPI transactions, ensuring a secure and systematic participation framework. The ASBA process not only enhances transparency but also streamlines the bidding experience for investors.
Listing and Market Presence
Upon successful completion of the IPO, the equity shares are expected to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This dual listing will significantly enhance Hyundai Motor India’s market presence, providing investors with ample trading opportunities and visibility.
The involvement of prominent Book Running Lead Managers (BRLMs) such as Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities and Capital Markets, J.P. Morgan India, and Morgan Stanley India underscores the scale and expected impact of this IPO. Their expertise will be crucial in navigating the complexities of the IPO process and ensuring alignment with market expectations.
Conclusion
Hyundai Motor India’s upcoming IPO represents a pivotal moment not only for the company but also for the broader financial market. With a well-structured allocation strategy that accommodates various investor categories, particularly non-institutional investors, this IPO promises to be a significant event in the investment landscape. As the company continues to solidify its position within the global automotive industry, investors are presented with a unique opportunity to be part of its growth story.
As the date approaches, potential investors should stay informed and prepared to participate in what is expected to be a landmark offering in the Indian stock market.