(Reuters) – Hyundai India’s $3.3 billion IPO is 42% subscribed as of the second day of bidding, mainly driven by employees who bought shares at a discount and have already oversubscribed their allocation.
Initially, the IPO was 18% subscribed when bidding began on Tuesday. There is still one day left for bidding.
Shares are expected to start trading on October 22.
WHY IT IS IMPORTANT
This IPO is India’s largest share sale and Hyundai’s first outside South Korea. It’s also the second-largest global IPO of the year.
Demand indicates some investor caution about the valuation, which some believe is too close to market leader Suzuki Maruti. Analysts suggest the large size of the IPO may also contribute to slower subscriptions.
BY THE NUMBERS
Hyundai employees bid 1.3 times the 778,400 shares set aside for them. Qualified institutional buyers have subscribed to 58% of their allocation, while retail investors, who have the largest share of available stock, have subscribed to 38% of the 49.5 million shares.
KEY CONTEXT
India is the world’s third-largest car market, with record-high sales driven largely by SUVs, which make up about two-thirds of Hyundai’s volume in the country.
This year, Indian equity markets have reached all-time highs, encouraging companies to pursue IPOs. Over 260 companies have raised more than $9 billion this year, surpassing the $7.4 billion raised last year during the same period.
(Reporting by Nandan Mandayam in Bengaluru; Editing by Tomasz Janowski)
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