Ahead of mega IPO, Hyundai Motor India mobilises Rs 8,315 crore from anchor investors

Hyundai Motor India Ltd (HMIL), the Indian arm of South Korean automaker Hyundai, on Monday raised Rs 8,315 crore from anchor investors, a day before its much-awaited initial share-sale opening for public subscription.

New World Fund Inc, Government of Singapore, Fidelity Funds, BlackRock Global Funds, JP Morgan Funds, HDFC Life Insurance Company and SBI Life Insurance Company were among the anchor investors who were allotted shares, according to a circular uploaded on the BSE website.

This would be the largest IPO in India, surpassing LIC's initial share sale of Rs 21,000 crore.

According to the circular, HMIL has allotted 4.24 crore shares to 225 funds at Rs 1,960 apiece, which is also the upper end of the price band. This translated into a transaction size of Rs 8,315.27 crore.

Out of the total allocation of 4.24 crore equity shares to the anchor investors, 1.46 crore equity shares, amounting to 34.42 per cent of the total, were allocated to 21 domestic mutual funds through 83 schemes.

Among the mutual funds that participated in the anchor round are -- ICICI Prudential Mutual Fund (MF), HDFC MF, SBI MF, Nippon India MF, Kotak MF, Axis MF, Aditya Birla Sun Life MF, UTI MF and Bandhan MF.

The Rs 27,870 crore IPO, with a price band of Rs 1,865-1,960 per share, will open for public subscription on October 15 and conclude on October 17.

The proposed IPO is entirely an offer-for-sale (OFS) of 14,21,94,700 equity shares by promoter Hyundai Motor Company (HMC), with no fresh issue component.

This is the first initial share sale of an automaker in over two decades, following Japanese carmaker Maruti Suzuki's listing in 2003. The South Korean parent is diluting some of the stake through the OFS route.

Since the public issue is completely an OFS, Hyundai Motor India Ltd, the second largest carmaker in India after Maruti Suzuki, will not receive any proceeds from the IPO.

HMIL stated that it expects that the listing of the equity shares "will enhance our visibility and brand image and provide liquidity and a public market for the shares".

At the upper end of the price band, the IPO size has been pegged at Rs 27,870 crore (USD 3.3 billion), and the company's market valuation at around Rs 1.6 lakh crore (about USD 19 billion) post-issue.

HMIL commenced operations in India in 1996 and currently, sells 13 models across segments.