GIC and BlackRock snap up Hyundai India shares in record $4.3 billion IPO
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The IPO response shows continued enthusiasm for India’s capital markets, with 260 companies having raised more than US$9 billion so far in 2024.
PHOTO: EPA-EFE
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SYDNEY/SEOUL - Hyundai Motor India launched a US$3.3 billion (S$4.3 billion) initial public offering (IPO), the country’s largest ever, as it sold shares worth US$989.4 million to institutional investors on Oct 14.
Singapore sovereign wealth fund GIC and US asset management giant BlackRock together picked up stakes worth a total of US$77.3 million, while American financial major Fidelity bought shares worth US$76.5 million. Domestic mutual funds were allocated shares worth a total of US$340 million.
The IPO response shows continued enthusiasm for India’s capital markets, with 260 companies having raised more than US$9 billion so far in 2024, according to LSEG data. The year-to-date volume has already surpassed the US$7.42 billion total raised in 2023.
Hyundai will not issue new shares in the IPO, in which its South Korean parent will sell up to 17.5 per cent of its stake in the wholly owned unit that will be valued at up to US$19 billion.
At that size, Hyundai India will make up about 40 per cent of its parent company Hyundai Motor’s market capitalisation.
According to official filings, 142,194,700 shares are on offer in a price band of 1,865 to 1,960 rupees, and the deal is the first time Hyundai is listed outside its South Korean home market.
Retail and other investors can place orders from Oct 15 to Oct 17 following on from Oct 14’s buying by the anchor investors – large institutions that usually buy shares at the upper end of the price band and are subject to a lock-in period when they cannot sell shares.
The stock will begin trading in Mumbai on Oct 22.
Hyundai India’s IPO is set to eclipse the country’s previous record of Life Insurance Corporation of India’s 2022 deal when it raised US$2.5 billion.
Globally, it will be the second-largest IPO in 2024 in terms of money raised, following Lineage’s US$5.1 billion US IPO in July.
With its sport utility vehicle-focused portfolio, Hyundai India is seeking to capitalise on consumer preferences for bigger vehicles and safety, analysts at IDBI Capital said, adding this should help the company gain market share and grow ahead of the industry.
Analysts said anchor investors had the prospect of long-term value as Hyundai Motor expands and strengthens its position in the Indian market.
“The company’s plans for a 250,000 vehicle expansion by December 2025 show that there is apparent money in the long term for anchor investors. This, along with prospective market share improvement, provides a runway of growth for the company,” said Mr Arun Kejriwal, founder of Kejriwal Research & Investment Services.
Kiwoom Securities analyst Shin Yoon-chul said the IPO was timely as the auto sector has been leading performance on the Indian stock market.
The analyst said funds raised by the IPO could help the company “secure a sizeable investment capacity” and close the market share gap with India’s biggest market player Maruti Suzuki.
Apart from increasing its SUV range, Hyundai Motor, India’s second-biggest player, plans to launch its first India-made electric vehicle in early 2025 and introduce at least two petrol-powered models tailored to the market starting in 2026. REUTERS
