Hyundai Motor India, a part of the Hyundai Motor Group, the third largest auto OEM in the world by passenger vehicle sales in 2023, plans to open its initial public offering (IPO) of Equity Shares on Tuesday, October 15, 2024. The Anchor Investor Bidding Date will be Monday, October 14, 2024, with the Bid/Offer Closing Date on Thursday, October 17, 2024. The price band for the offer is set between INR 1,865 and INR 1,960 per Equity Share. The IPO will see an offer for sale of up to 142,194,700 Equity Shares by the Promoter Selling Shareholder, Hyundai Motor Company.
Allocation strategy
Hyundai Motor India will not receive any proceeds from this offer. The offer is made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended, and Regulation 31 of the SEBI ICDR Regulations. It's executed through the Book Building Process. Qualified Institutional Buyers (QIBs) will have not more than 50% of the Net Offer allocated on a proportionate basis. Within the QIB allocation, up to 60% may be allocated to Anchor Investors at the company’s discretion, with one-third reserved for domestic Mutual Funds. Additionally, 5% of the Net QIB Portion is reserved for Mutual Funds, and the remainder for all other QIBs.
For non-institutional investors, not less than 15% of the Net Offer will be available, divided into two sub-categories: one-third for application sizes between INR 200,000 and INR 1,000,000, and two-thirds for application sizes above INR 1,000,000. Any undersubscription may be reallocated to the other sub-category. Retail Individual Investors will have access to not less than 35% of the Net Offer, and allocations will be proportionate, subject to valid bids received at or above the Offer Price. Equity Shares will also be allocated to Eligible Employees on a proportionate basis.
The participation process for all bidders, except Anchor Investors, must be via the Application Supported by Blocked Amount (ASBA) process, including the provision of bank account details or UPI ID for UPI Bidders. The Equity Shares are proposed to be listed on both BSE Limited and the National Stock Exchange of India Limited. The Book Running Lead Managers to the offer are Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, and Morgan Stanley India Company Private Limited.
"The Company’s initial public offering comprises an offer for sale of up to 142,194,700 Equity Shares by Hyundai Motor Company (the “Promoter Selling Shareholder”). The Company will not receive any proceeds from the offer," according to the official statement.
Hyundai Motor Group is recognized as the third largest auto OEM globally, emphasising the significance of this IPO on the international market. The structured approach of the IPO aligns with regulatory standards, ensuring compliance and strategic allocation amongst various investor categories.
The Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (the “SCRR”), read with Regulation 31 of the SEBI ICDR Regulations. The Offer is being made through the Book Building Process in accordance with Regulation 6(1) of the SEBI ICDR Regulations wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (the “QIB Portion”).
For non-institutional investors, not less than 15% of the Net Offer shall be available for allocation to Bidders with an application size of more than INR 200,000 and up to INR 1,000,000 and two-thirds of the Non-Institutional Category shall be available for allocation to Bidders with an application size of more than INR 1,000,000. This defined allocation strategy ensures that a broad spectrum of non-institutional investors can participate, catering to varying investment scales, the company mentioned in a media release.
ASBA process and listing on BSE and NSE
The detailed ASBA process, mandating bank account or UPI ID details, underscores a systematic and secure participation framework, enhancing the IPO’s robustness and accessibility for all bidders. This method reinforces transparency and efficiency in the bidding process, an essential factor in large-scale IPOs.
The listing on BSE and NSE further solidifies the company’s market presence, promising substantial visibility and trading opportunities upon successful IPO completion. The involvement of prominent Book Running Lead Managers underscores the IPO’s scale and expected market impact.
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited and Morgan Stanley India Company Private Limited are the Book Running Lead Managers (“BRLMs”) to the Offer. These institutions bring significant expertise, ensuring that the IPO process is managed with high proficiency and market alignment, the company said.
In conclusion, the upcoming IPO of Hyundai Motor India Limited, structured meticulously to accommodate various investor categories, promises to be a significant event in the financial market, reflecting the company’s robust position within the global automotive industry.
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