At just 50%, Hyundai sees worst retail subscription among India's 5 biggest IPOs

Retail investors, usually quick to pounce on IPO opportunities, largely stayed away from India's biggest public offering of Hyundai India. At just 50%, the IPO saw the worst retail subscription among the biggest 5 offers the country has seen.

Data from primedatabase.com showed that retail subscription for India's mega IPOs is generally subdued, which is not the case with other smaller issues. For LIC, the second biggest IPO, the retail category was booked 1.61 times.

The public offers of Paytm and Coal India, meanwhile, saw a subscription of 1.27 and 2.21 times, respectively.




The Rs 27,870 crore IPO of Hyundai India sailed through on the last day of the bidding process with 2.37 times subscription, thanks to institutional investors.

Expensive pricing dampened the sentiments for the Korean automaker's India IPO as the company was valued at a PE of 26x its FY25 earnings, much higher than the industry average of 24.41x.

It remains to be seen what will be the appetite of investors in the secondary market, once trading starts on October 22. The GMP is Nil in the grey market.

Most analysts advised investors to subscribe to the issue subscribing to Hyundai IPO only for the long term as the company has left nothing for investors for quick gains.
Also Read: Hyundai India fends off a scare as IPO booked 2.37 times on last day, but GMP down to 0

Since the IPO is an OFS, all the proceeds will go to the selling shareholder.

Even though the entire proceeds from the IPO will go to the parent company, the management said funds will be used for research and development and new innovative offerings.

Hyundai is the second largest carmaker in India with a portfolio of 13 passenger vehicle models across sedans, hatchbacks and SUVs. The company aims to leverage its strong local manufacturing capabilities to position itself as Hyundai Motor's largest production base in Asia.

It operates two production facilities in Chennai with a combined installed capacity of 8.24 lakh units per annum and is currently running at over 90%+ capacity utilization.

For the quarter ending June 2024, the company reported a revenue of Rs 17,344 crore, marking a growth from Rs 16,624 crore in the same period last year. Of the total revenue, 76% was derived from the domestic market, while exports accounted for 24%.