Hyundai Motor India Limited (HMIL) has been one of the cornerstones of the Indian automotive landscape since it was first established in 1996. As a wholly-owned subsidiary of the South Korean automotive giant Hyundai Motor Company, HMIL has solidified its position as the second-largest car manufacturer and the largest exporter of passenger vehicles in India.
In a bid to capitalise on the market-leading position, the company has announced an initial public offering, which is generating significant buzz among the Indian investor community. To apply for this 2024 Diwali IPO from Hyundai India, you need a trading and demat account. Samco Securities offers one of the most user-friendly trading and demat accounts that can make IPO investing simple.
Now, before we proceed to explore the various developments surrounding Hyundai's potential IPO, let us look at a few of the reasons why this particular public issue is garnering significant attention from investors.
Why Hyundai’s IPO is Gaining Attention
One of the primary driving factors for the increased interest in Hyundai India’s IPO from retail and institutional investors is its consistent financial performance and profitability. Over the previous three financial years, the company’s revenue and profitability have grown significantly year-over-year. Robust financial performance combined with established brand presence and high customer loyalty, make it an appealing prospect for long-term investors seeking stable returns.
Another major reason is Hyundai’s unwavering commitment to innovation and focus on the burgeoning electric vehicle industry. The increasing priority the company places on EVs aligns with global automotive trends and India's push towards sustainable transportation. This ensures strong future growth potential for the company, which is one of the most important factors many investors look out for when investing.
Key Details of the Upcoming Hyundai Motor India Limited IPO
Hyundai’s move to launch a public issue in India after being in India for more than 25 years is highly strategic. If the IPO is successful, it would grant the company more independence while simultaneously helping the South Korean parent company monetise its assets.
If you intend to participate in this large-scale public issue, here is an extensive breakdown of some key aspects of this Diwali IPO 2024.
- Hyundai IPO Date 2024 Launch
According to the final Red Herring Prospectus (RHP) filed by Hyundai India, the public issue will remain open for subscription from October 15 to October 17, 2024.
Once the offer subscription period closes, the allotment and credit of shares to the investors’ demat accounts are likely to be completed by October 21, 2024.
The company’s shares will then be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on October 22, 2024.
- Issue Pricing
Now that you are aware of the Hyundai IPO date 2024, let us look at another major aspect of this public issue: pricing.
Through a press release on October 09, 2024, Hyundai Motor India Limited announced the price band for this book-built IPO. The company has set the price band per share between Rs. 1,865 and Rs. 1,960.
Considering that the face value of each equity share of HMIL is just Rs. 10 per share, the announced Hyundai IPO price band is at a steep premium. Also, this puts the company’s price-to-earnings (P/E) ratio of the company at around 26.28.
- Issue Size
The entire upcoming public issue is an Offer for Sale (OFS) from the only promoter-selling shareholder: Hyundai Motor Company, which is the South Korean parent company of HMIL.
The promoter-selling shareholder is aiming to offload up to 14,21,94,700 equity shares through this IPO. The sale of approximately 14.22 crore shares is likely to net the parent company around Rs. 27,870.16 crore, making it the largest-ever initial public offering in India.
Despite selling these many equity shares, the parent company would only relinquish 17.50% of its control over the company. After the issue, the promoter will continue to hold 82.50% of ownership in Hyundai Motor India Limited.
- Other Details
The minimum lot size of the public issue is set at 7 shares, meaning interested investors can apply for shares only in multiples of 7. Investors intending to apply under the retail category can place bids for a maximum of 14 lots (98 shares) at the ceiling price of Rs. 1,960.
The upcoming 2024 Diwali IPO of Hyundai Motor India Limited features special concessions to permanent employees of the company. As per the Red Herring Prospectus, about 7,78,400 equity shares out of the total issue have been set aside for employees. Additionally, employees who apply to this issue are also eligible for a discount on the Hyundai IPO share price of about Rs. 186 per share.
The Broader Trend of Diwali IPO 2024 Launches
The timing of Hyundai's IPO during the 2024 Diwali season is far from coincidental. In fact, there is a well-established trend of several companies launching public issues during India's festive season, especially around Diwali. Such a strategy capitalises on the generally positive market sentiment and increased liquidity in the market during this period.
Historical data shows that IPOs launched during the Diwali season often receive strong investor interest and oversubscription.
In 2023, for instance, two companies Protean eGov Technologies Limited and ESAF Small Finance Bank Limited were both oversubscribed by 23.86 times and 77 times respectively, indicating significant demand for initial public offerings during the festive season.
Similarly, the 2022 and 2023 Diwali seasons also saw successful IPOs from companies like Electronics Mart India, Nykaa, and Policybazaar, all of which received overwhelming responses from investors.
In line with these past public issues, the 2024 Diwali IPO season is also expected to receive a strong response from investors. With Hyundai Motor India Limited’s IPO significantly larger in size compared to the other issues, it could potentially set new benchmarks for investor interest and subscription rates. The automotive sector's critical role in India's economy, coupled with Hyundai's strong brand presence, positions this public issue as a potential game-changer in the Indian capital markets.
How to Invest in the Hyundai IPO?
If you are interested in the upcoming Hyundai Motor India Limited public issue, here is a step-by-step process detailing how you can invest in it.
- Step 1: Open a demat account
As per SEBI regulations, a demat account is required for investing in the Indian stock market. Therefore, the first step you should take to invest in the upcoming Diwali IPO 2024 of Hyundai India is to open a demat account. With Samco Securities, you can open a trading and demat account within minutes through a simple online process.
- Step 2: Set up a UPI ID
All initial public offerings in India now require the applying investors to set a UPI auto-debit mandate for an amount equivalent to the number of lots they apply for. Until this auto-debit mandate is active, the requisite funds will be locked in the bank account and rendered unusable.
Investors who get successful allotment will have the funds debited from their account automatically. Meanwhile, investors who do not get any shares allotted will have the temporary hold over the funds in their bank account removed.
- Step 3: Fill Out the IPO application
If you have opened a trading and demat account with a stockbroker, you can apply for Hyundai India’s public issue through their trading portal. All you need to do is log into your broker’s trading portal, navigate to the IPO section, and select Hyundai Motor India Limited from the list of issues available for subscription.
Once you select the IPO, proceed to fill in the application by entering the number of shares you wish to apply for and your bid price within the specified price band. Before submitting the IPO application, remember to confirm your demat account number and other key details.
- Step 4: Authorise the UPI mandate
Upon submitting the IPO application, a UPI mandate request will be sent. Authorise the mandate by accepting it via a UPI app on your smartphone to complete the IPO application process.
Other Tips for Potential IPO Investors
As a potential investor, here are a few tips you can follow to make well-informed investment decisions and maximise your chances of allotment.
- Before applying for the Diwali IPO 2024 from Hyundai India, remember to thoroughly read through the Red Herring Prospectus (RHP) to fully understand the company’s business model, financial performance, and risk factors.
- Although allotment is determined based on a pro-rata or lottery system, applying early can ensure your application is processed without any last-minute technical glitches.
- To maximise your chances of allotment, consider selecting the highest price in the Hyundai IPO price band. Alternatively, you can choose the ‘cut-off price’ option when submitting your application.
- If you wish for your application to be processed under the retail category of investors, do not apply for more than Rs. 2 lakh worth of shares. As a retail investor, the maximum number of lots you can apply for is 14 lots (98 shares).
Conclusion
The upcoming Hyundai Motor India Limited public issue is all set to take the Diwali IPO 2024 season by storm. As one of the largest and most anticipated IPOs in recent years, it offers investors an opportunity to participate in the growth story of a leading automotive player in India. That said, while the IPO presents exciting prospects, it is advisable to approach it with due diligence and careful consideration of your financial goals and risk tolerance.
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