• Hyundai Motor India's IPO was oversubscribed 2.34 times, marking the first automaker listing in India in over two decades.
• The IPO raised Rs 8,315 crore from anchor investors, with New World Fund Inc. securing the highest allocation.
• Hyundai holds a 14.6% market share in India's passenger vehicle market and leads in the mid-size SUV segment.
• The successful IPO reflects robust growth and investor confidence in the Indian automotive industry.

In a significant development for the Indian automotive industry, Hyundai Motor India Ltd's initial public offering (IPO) has been subscribed 2.34 times till 4 p.m. on its third and last day. The IPO marks the first offer from an automaker to list in India in over two decades, a milestone that underscores the robust growth and investor confidence in the sector.

Hyundai India IPO, which was a pure offer for sale (OFS), saw the entire proceeds going to the promoter, Hyundai Motor Company. The price band for the IPO was fixed at Rs 1,865-Rs 1,960 per share. 

The subscription progress over the three days of the IPO was noteworthy. It started with an 18% subscription on the first day, reached 42% on the second day, and was subscribed 2.34 times overall by the end of the last day.

The qualified institutional buyers (QIB) portion in the IPO was subscribed nearly 7 times, according to the latest provisional data. The reserve portion for the QIB was subscribed 6.94 times, non-Institutional Investors (NII) subscribed 0.57 times, and retail investors subscribed 0.48 times.

Anchor Investors and Market Position

Ahead of the public issue, Hyundai Motor India raised a significant Rs 8,315 crore from anchor investors on Monday. It allotted 4.24 crore shares at Rs 1,960 apiece to 225 anchor investors, according to a company statement.

Among the anchor investors, New World Fund Inc. secured the highest allocation with a 9.29% stake. SBI Life Insurance Co., Government Pension Fund Global, and HDFC Life Insurance Co. received the second-highest allotment of 3.21% equity, while HSBC Kotak Flexi Cap Fund got a 2.38% stake in the company.

Hyundai Motor India has been a significant player in the domestic passenger vehicle (PV) market. In Q1 FY25, it held a 14.6% market share, second only to Maruti Suzuki, which has a 41% share in this category. However, Hyundai Motor India leads the market by volume in the mid-size SUV segment with around 38% share as of June 2024. It is also India's second-largest exporter of PV from April 2021 to June 2024.

Financial Performance and Historical Context

In FY 2023-24, Hyundai Motor India sold 7.77 lakh vehicles, of which 21% was exported to countries like Africa, the Middle East, Europe, and Latin America. The company has 1,366 sales points and 1,550 service outlets in India.

Its revenue in the last financial year was Rs 69,829 crore. During this period, the company made a profit of Rs 6,060 crore, and its margin was around 13%. Hyundai Motor India's revenue in the Q1 of FY 2024-25 was Rs 17,344 crore. From April to September, the company made a profit of Rs 1,489 crore, and its margin was 13.5%.

This IPO is reminiscent of the Maruti Suzuki IPO in 2003, which was also a significant event in the Indian automotive industry. The Maruti IPO was oversubscribed 10 times, reflecting the strong investor interest in the sector. The Hyundai IPO, like the Maruti IPO, is a testament to the growth potential of the Indian automotive industry and the confidence of investors in this sector.