Hyundai Motor India Raises ₹8,315 Crore from Anchor Investors Ahead of Landmark IPO

Hyundai Motor India Ltd. (HMIL) has successfully raised ₹8,315 crore from anchor investors, setting the stage for the country’s largest-ever initial public offering (IPO). The Indian subsidiary of South Korea’s Hyundai Motor Company allotted 42.4 million shares to 225 funds at ₹1,960 per share, which is the upper limit of the set price band.

Singapore’s sovereign wealth fund GIC, New World Fund, and Fidelity are among the prominent investors in the anchor allocation. Additionally, domestic mutual funds such as ICICI Prudential MF, SBI MF, and HDFC MF received allotments and contributed through 83 investment schemes.

Although this anchor issue size is smaller than that of One97 Communications (Paytm), which raised ₹18,300 crore in its 2021 IPO, Hyundai’s offering is notable for being the biggest maiden share sale in Indian market history. The IPO will open to the public on Tuesday and close on Thursday, with market watchers keenly observing how it fares as a test of the domestic equity market’s strength.

Through this IPO, Hyundai’s parent company, headquartered in Seoul, plans to divest 17.5% of its stake, targeting a total fundraising of ₹27,870 crore. The price range has been set between ₹1,865 and ₹1,960 per share, valuing Hyundai Motor India at between ₹1.51 trillion and ₹1.59 trillion, making it the second-largest passenger carmaker in India after Maruti Suzuki.

Analysts estimate Hyundai’s valuation at 26.3 times its FY24 earnings, a 10% discount compared to Maruti Suzuki. Despite this, Hyundai’s superior profit margins and returns profile have led some experts to suggest it could command a premium over its competitor in the long term.

However, caution remains. Analysts from Aditya Birla Capital and ICICI Securities advise that while Hyundai is poised for solid performance, its high valuation leaves limited room for immediate post-listing gains. Both firms recommend the IPO for investors with a long-term outlook, expecting double-digit returns in the medium to long term.