The initial public offering of Hyundai Motor India Ltd (HMIL) was subscribed 2.37 times as bidding closed on Thursday.
Institutional investors made a beeline for the company’s shares, but the response was weak among retail investors and high net worth individuals.
HMIL’s ₹27,870-crore IPO is the largest in India overtaking LIC’s float of₹ 21,000 crore.
The IPO received bids for 23.63 crore shares against 9.97 crore shares on offer.The share of Qualified Institutional Buyers (QIBs) was subscribed 6.97 times with bids for 19.72 crore shares.
The portion kept for non-institutional investors saw 60 per cent subscription, while the quota for retail individual investors (RIIs) received 50 per cent subscription.
The IPO came at a price band of ₹1,865-1,960 per share.
At the higher end of the price band, investors bid for shares worth ₹46,319 crore, and the company’s market valuation was around ₹1.6 lakh crore (about 19 billion) post-issue. That values the company at about 40 per cent of its Korean parent.
Prior to the open bidding process, so-called “anchor” institutional investors, including BlackRock and Fidelity, had on Monday snapped up shares worth nearly $1 billion (₹8,315 crore) as part of the offering. The focus now shifts to the listing, which is likely on October 22.
Most analysts expect a modest debut for the country’s second largest automaker. Investors with medium- to long-term perspective can subscribe to the issue.
“Hyundai’s issue is not priced attractively forretail investors and highnet worth individuals,” said Arun Kejriwal, founder ofKejriwal Research.
More than 260 companies in India have raised more than $9 billion through IPOs so far this year, according to LSEG data, higher than the $7.42 billion raised in all of last year.
That has propelled the country’s share in Asia equity capital market deals to a record high.
HMIL commenced operations in India in 1996 and sells 13 models across segments at present.
In its draft red herring prospectus, the company said it would invest ₹32,000 crore in India in various projects in the country.
The company’s Chennai’s facility has an annual production capacity of 824,000 units. It has also acquitted General Motors India’s Talegaon Plant in Maharashtra.
