IPO – Central News Hub

Hyundai IPO Off to a Quiet Start

The company plans to raise up to ₹27,870 crore, positioning it as the largest IPO in the Indian equity market since Life Insurance Corporation of India (LIC) raised ₹21,000 crore in 2022…reports Asian Lite News

The initial public offering (IPO) of Hyundai Motor India saw a lukewarm response from investors on Tuesday, with the issue subscribed 0.18 times or 18 per cent on Day 1 of the subscription.

The company aims to raise up to Rs 27,870 crore, making it the largest-ever IPO of the Indian equity market history since 2022, when Life Insurance Corporation of India (LIC) raised Rs 21,000 crore.

It is open till October 17, and the IPO price band has been fixed at Rs 1,865- Rs 1,960 per share.

One lot of Hyundai Motor India’s IPO has seven shares. After the subscription window closes, the share allotment is expected to be finalised on October 18. The shares will be credited to demat accounts on October 21.

Hyundai Motor India shares are likely to debut on stock exchanges on October 22.

The maiden share sale will be a full offer for sale (OFS). It is the first offer from an automaker to list in India in over two decades and the entire proceeds will go to the promoter.

Hyundai Motor India raised approximately Rs 8,315 crore from anchor investors on Monday, ahead of its IPO. The company allotted 4.24 crore shares at Rs 1,960 apiece to 225 anchor investors, according to the company statement.

Hyundai Motor India held a 14.6 per cent market share in the domestic passenger vehicle (PV) market in Q1 FY25, second to Maruti Suzuki which has a 41 per cent share in this category. However, Hyundai Motor India is the market leader by volume in the mid-size SUV segment with around 38 per cent share as on June 2024. It is also India’s second-largest exporter of PV from April 2021 till June this year. In FY 2023-24, the company sold 7.77 lakh vehicles, of which 21 per cent was exported to countries like Africa, the Middle East, Europe and Latin America.

Hyundai Motor India has 1,366 sales points and 1,550 service outlets in India. The company’s revenue in the financial year (FY) 2023-24 was Rs 69,829 crore. During this period, the company made a profit of Rs 6,060 crore and the company’s margin was 13.1 per cent. India’s second-largest carmaker’s revenue in the first quarter of FY 2024-25 was Rs 17,344 crore. During this period, the company made a profit of Rs 1,489 crore and the margin was 13.5 per cent.

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IPO Wave Hits India

According to analysts, this influx is lowering bond yields, reducing borrowing costs, and positioning Indian debt as increasingly attractive for foreign investors…reports Asian Lite News

As Indian stock markets continue to show robust growth despite global uncertainties, a record 15 companies registered their initial public offering (IPO) documents with the Securities and Exchange Board of India (SEBI) on the last day of September.

This took the total filings for the month to 41 which is the highest-ever IPO document filing in a single month.

According to market watchers, the surge in draft red herring prospectus (DRHP) filings happened as audited financials for the quarter ending March 31 are valid only until September 30.

“We forecast more than Rs 1.5 lakh crore of fund raise via IPOs this year. Increasing number of growth-stage businesses will hit the street. Moreover, we will have trend of multinationals coming to tap Indian capital market,” said Mahavir Lunawat, Managing Director, Pantomath Capital Advisors.

“Besides, several other market liquidity parameters, notably monthly mutual fund flow has doubled since last quarter and we are getting close to Rs 40,000 crore of money every month. This has fuelled capital market buoyancy phenomenally,” he added.

The Indian equity markets have reached all-time closing highs, reflecting investor confidence driven by anticipated changes in the domestic interest rate cycle following the US Federal Reserve’s recent 50-basis-point rate cut.

The overall trend in the Indian equity market remains positive, said experts.

Additionally, the inclusion of Indian sovereign bonds in JP Morgan’s global debt indices has attracted around $18 billion in foreign investment over the past year, with expectations for continued growth following recent US interest rate cuts.

According to analysts, this influx is lowering bond yields, reducing borrowing costs, and positioning Indian debt as increasingly attractive for foreign investors. Future monthly inflows could reach $2 to $3 billion, significantly boosting foreign participation in India’s bond market.

As per Angel One Wealth data, in the first half of this year, more than 5,450 companies have been listed across the world, in which India’s share was about 25 per cent.

Last year also a large number of IPO listings were seen in India. The reason for this was the high inflow by domestic investors in emerging companies and sectors.

SEBI Tightens Rules

The Securities and Exchange Board of India (SEBI) has announced several new measures to curb speculative trading in the futures and option (F&O) segment as nine out of ten participants have consistently lost money over the past three years.

Under the F&O measures, market regular has increased the minimum contract size in the index derivatives to Rs 15 lakh from the current Rs 5 lakh.

SEBI has also reduced the weekly index expiry count to one per exchange. This means that exchanges can only offer one expiry in a week on one benchmark index.

“In order to specifically address this issue of excessive trading in index derivatives on expiry day, it has been decided to rationalise index derivatives products offered by exchanges which expire on a weekly basis. Henceforth, each exchange may provide derivatives contracts for only one of its benchmark index with weekly expiry,” SEBI said in a circular.

The market regulator has taken this step due to heavy losses incurred by retail investors in the F&O segment.

As per the recent study released by SEBI, in the last three years, a combined loss of Rs 1.81 lakh crore has been incurred by 1.10 crore traders. Out of these, only 7 per cent of traders have been successful in making a profit.

After the new SEBI circular, the size of derivatives contracts in benchmark indices like Nifty and Sensex will increase from Rs 5 lakh-Rs 10 lakh to Rs 15 lakh-Rs 20 lakh.

This measure would be effective for all new index derivatives contracts introduced after November 20, 2024.

The derivatives market in India has significantly increased in the last few years. In July, SEBI’s paper said that India’s derivatives market has surpassed the cash market. At present, India accounts for 30 to 50 per cent of the total global derivatives trading.

According to the data, cash market turnover in India has doubled from FY 20 to FY 24, while the turnover of index options has increased 12 times to Rs 138 lakh crore in FY 24, which was Rs 11 lakh crore in FY 20.

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