Hyundai Motor India Secures Rs 8,315 Crore from Anchor Investors Before IPO Launch

Hyundai Motor India Ltd (HMIL), a subsidiary of the South Korean automaker, has secured Rs 8,315 crore from anchor investors. This funding comes just before its initial public offering (IPO) opens for public subscription. The IPO is set to surpass the previous record held by LIC's Rs 21,000 crore share sale. Major investors include New World Fund Inc, Government of Singapore, and Fidelity Funds.

The company has allocated 4.24 crore shares to 225 funds at Rs 1,960 each, which is the top end of the price range. This allocation results in a transaction size of Rs 8,315.27 crore. Among these shares, 1.46 crore, or 34.42% of the total, were given to 21 domestic mutual funds through 83 schemes.

Anchor Investors and Mutual Funds

Prominent mutual funds participating in this anchor round include ICICI Prudential MF, HDFC MF, SBI MF, Nippon India MF, Kotak MF, Axis MF, Aditya Birla Sun Life MF, UTI MF, and Bandhan MF. The IPO is priced between Rs 1,865 and Rs 1,960 per share and will be open for public subscription from October 15 to October 17.

This IPO marks the first initial share sale by an automaker in India in over two decades since Maruti Suzuki's listing in 2003. Hyundai Motor Company (HMC), the parent company, is reducing its stake through this offer-for-sale (OFS) route. As it is entirely an OFS, HMIL will not receive any proceeds from this IPO.

IPO Details and Market Impact

The proposed IPO consists solely of an OFS of 14,21,94,700 equity shares by HMC. HMIL anticipates that listing its shares will boost its visibility and brand image while providing liquidity and a public market for its shares. At the upper price band limit, the IPO size is estimated at Rs 27,870 crore (USD 3.3 billion), with a market valuation post-issue of approximately Rs 1.6 lakh crore (USD 19 billion).

HMIL began its operations in India in 1996 and currently offers 13 models across different segments. As India's second-largest carmaker after Maruti Suzuki, HMIL aims to strengthen its market presence through this significant financial move.

The company's strategic decision to go public reflects its confidence in enhancing shareholder value and expanding its footprint in the competitive Indian automotive market.