Hyundai's IPO in India Draws Impressive Interest

The highly anticipated IPO of Hyundai Motor India, with an impressive volume of $3.3 billion, generated a solid response on the first day of the subscription period, being 18 percent subscribed. Notably, it was primarily the dedicated employees who snapped up a large portion of the shares reserved for them, reflecting the company culture and underpinning this year's largest IPO in India. The IPO, considered the first of its kind for an automotive company in India in the past twenty years, runs until Thursday. Leading the investor demand are institutional heavyweights like BlackRock and Fidelity, who acquired shares worth $989.4 million earlier in the week. Meanwhile, the Indian stock market is recording all-time highs, making the timing of this IPO appear even more favorable. Over 260 companies have already raised more than $9 billion from IPOs in the Indian market in 2023, significantly surpassing the $7.42 billion raised during the same period last year. Globally, this IPO represents the second-largest Initial Public Offering of the year, only surpassed by Lineage Inc in the United States. Interestingly, Hyundai offered its own employees a discount of 186 rupees per share, with the share price ranging from 1,865 to 1,960 rupees. Demand is high, as reflected in the extensive bids from employees and the broad international investor base. The expected market capitalization at the upper end of the price range stands at a staggering $19 billion, roughly 40 percent of the valuation of the Korean parent company. Amidst a challenging market with a rapidly changing competitive environment, Hyundai has maintained its strong position as the second-largest automobile manufacturer in India, even as national competitors like Tata Motors and Mahindra & Mahindra noticeably gain market share—particularly through the introduction of new, popular SUVs. An expansion of production capacities could help the Southeast Asian brand grow faster and close the gap to market leader Maruti Suzuki, while simultaneously defending its lead over emerging domestic competitors.