MUMBAI: Hyundai Motor India‘s IPO, the country’s largest-ever, has been fully subscribed, paving the way for the listing of the company next week.
Hyundai’s Rs 27,870 crore IPO was oversubscribed nearly 2.4 times at the end of the last day of bidding, despite wariness from retail investors. Institutional buyers, led by foreign investors, drove demand in the final hours of bidding – securing nearly 7 times their allotted shares (28% of issue).Non-institutional investors subscribed to 60% of their portion (21%), while retail investors showed a milder response at only 50% subscription of their allotment (50% of issue size).
The IPO marks India’s first by an auto maker in over two decades, the one before being Maruti Suzuki’s offer in 2003. Hyundai Motor India managed to raise Rs 8,315 crore from anchor investors on the first day, with the price band set at Rs 1,865 to Rs 1,960 per share. The offer for sale involved 14.2 crore equity shares, with the promoter – Hyundai Motor Company – divesting a 17.5% stake in its Indian subsidiary.
“The issue was priced richly and hence investor interest was primarily from long-term institutional investors including FPIs,” a fund manager said, adding that the successful issue – despite under subscription by retail investors – underscores the country’s capacity to handle large-scale public offerings.
This bodes well for other mega issues such as Swiggy and NTPC’s.