• Hyundai Motor India's upcoming IPO will mark the first public offering by an automobile company in India in over two decades, following Maruti Suzuki's 2003 listing. The Rs 28,000-crore IPO is entirely an Offer-for-Sale (OFS), with no fresh issue of shares.

    The grey market premium (GMP) for Hyundai Motor India's IPO has seen a sharp decline, dropping by 75% over the past two weeks. As of October 9, the GMP for the automaker's shares is estimated at Rs 140-145, a steep fall from Rs 570 at the end of September.

    Hyundai Motor India Ltd’s unlisted shares have faced a significant price drop ahead of its highly anticipated IPO. This decline follows the company’s announcement of key details and the price band for its Rs 28,000-crore IPO, which is set to launch next week. The grey market, an unofficial trading space, often reflects investor sentiment ahead of a company’s public listing. The 75% fall in GMP may suggest weakening demand for the shares in this informal market.

    Despite this, Hyundai Motor India's Chief Operating Officer, Tarun Garg, remains positive about the company’s growth potential. He pointed out that Indian subsidiaries of global multinationals, like Hyundai India, often attract higher valuations due to robust growth prospects in the Indian market. Hyundai Motor India has a Price-to-Earnings (P/E) ratio of 27x, compared to the parent company Hyundai Motor’s 5x.

    Financially, Hyundai Motor India reported a net profit of Rs 6,060 crore for the year ending March 2024, a 28.7% increase from the previous year. Its revenue also saw a 15.8% year-on-year growth, reaching Rs 69,829 crore.

    A report from Aequitas Investments highlights that while Hyundai Motor India contributes just 6.5% of the global revenue and 8% of global profits, it could be valued at 42% of its parent company's market capitalization upon listing.

    Current market trends suggest that Hyundai shares may debut at a modest 7% premium if conditions hold steady. However, experts caution that grey market trends are merely early indicators, and the actual listing price, set for October 22, may differ. The IPO will open for retail subscription on Tuesday, October 15.

    Key Highlights of the Hyundai India IPO:

    The Hyundai Motor India IPO is valued at Rs 27,870 crore at the upper end of the price band.
    The company has set a price band of Rs 1,865-1,960 per share, valuing it at Rs 1.6 lakh crore.
    The public subscription period runs from October 15 to October 17, with anchor investor bidding on October 14.
    The IPO is entirely an Offer-for-Sale (OFS) of 1.42 crore equity shares by promoter Hyundai Motor Company, with no new shares being issued.
    It is the first IPO by an automaker in India since Maruti Suzuki’s 2003 listing.
    As the IPO is purely an OFS, Hyundai Motor India, India’s second-largest carmaker, will not directly receive any proceeds.
    Hyundai Motor India began operations in 1996 and currently offers 13 car models across different segments.