Hyundai Motor IPO fails to attract small investor as subscription hits 237%

Hyundai Motor India’s Rs27,870-crore initial public offer (IPO) of shares received overall subscription of 237 per cent of the offer size, as the mega issue closed for subscription on Thursday.

Touted as India's largest public float, Hyundai’s IPO failed to attract the small investor with retail portion subscribing to just 0.50 per cent of the total offer size.

Investor response in general was muted for most of the three days of the bidding process. The IPO was saved by institutional investors who poured money, taking the subscription to 237 per cent of the offer size on the third day.

The IPO, India's biggest-ever primary market share offer, was open for subscription from 15 to 17 October. However, it was subscribed just 18 per cent on the opening day and by the close of the second day, total subscription stood at 42 per cent.

Also, the IPO did not represent any investment in Hyundai Motor India, rather, it went to promoters of its parent company in South Korea. 

Moreover, the automobile industry in India remains highly competitive and fortunes of companies can change in a very short period, which makes investments in the sector risky.

Hyundai is reported to have sold the 142 million shares in a fixed price band of Rs1,865-1,960 per share.

Kotak Mahindra Capital Company Ltd, HSBC Securities and Capital Markets Pvt Ltd, JP Morgan India Private Ltd, Citigroup Global Markets India Private Ltd., and Morgan Stanley India Company Pvt Ltd acted as the book-running lead manager for its issue.

Kfin Technologies Ltd is the registrar to the issue.

Hyundai Motor said it would finalise the bonus share allotment on 18 October, while listing of the stock is slated for 22 October 2024.