Hyundai Motor India IPO: Auto stocks in focus as India's biggest issue till date opens

The automaker on Monday, October 14, raised a total of ₹8,315 crore from anchor investors ahead of the launch of its IPO.

According to stock exchange data, the Indian arm of South Korean automaker Hyundai allocated 4,24,24,890 equity shares to as many as 225 investors in the anchor round.

The shares were allotted at a price of ₹1,960 per share, mobilising around ₹8,315.28 crore. The shares were allocated at the upper band of the IPO price.

Hyundai Motor India IPO: A quick look at the important details

• The IPO size is ₹27,870 crore. Since, it is a complete offer for sale (OFS), the proceeds of the share sale will not go into the company's expansion programmes. 

• The IPO will open for public subscription on October 15 and conclude on October 17. 

• HMIL has set a price band of ₹1,865 to ₹1,960 per share for the offering, valuing the automaker at ₹1.6 lakh crore. At the upper end of the price band, the IPO size has been pegged at ₹27,870 crore.

• The company's IPO will surpass the ₹21,000 crore offering by Life Insurance Corporation of India (LIC) in May 2022.

Auto sector performance

Automobile retail sales in India declined 9% year-on-year in September amid a massive buildup of passenger vehicle inventory due to sluggish demand, dealer's body FADA said, urging original equipment manufacturers to take corrective steps.

The overall registrations declined to 17,23,330 units last month from 18,99,192 units in September 2023, as most of the categories including passenger vehicles and two-wheelers witnessed a year-on-year (Y-O-Y) drop.

Given the critical festive season around the corner, FADA urged OEMs (original equipment manufacturers) to take immediate corrective measures to avoid a financial setback.

"Despite the onset of festivals such as Ganesh Chaturthi and Onam, dealers have reported that the performance has been largely stagnant," Federation of Automobile Dealers Associations (FADA) President C S Vigneshwar said in a statement.

This suggests that overall market sentiment during these festive periods has been underwhelming, with a trend leaning towards flat or negative growth, Vigneshwar added.

Auto stocks performance

The NIFTY AUTO index has jumped 22% in the past six months. In comparison, the benchmark NIFTY50 index has gained nearly 13% during the period. 

Among individual names, Maruti Suzuki India stock has gained 1% in six months, while Tata Motors has slipped 7% during the window. Mahindra & Mahindra shares, on the other hand, jumped over 53% in the past six months.