Hyundai Motor India IPO: How to apply, calculate lot size, other key info

The public issue of Hyundai Motor India, which opened for subscription yesterday, will conclude on Thursday, October 17, 2024. Here are the key details of India's largest IPO for investors

Hyundai Motor India IPO:  Hyundai Motor India, on October 15,  kicked off its largest initial public offering (IPO) in the Indian market, set to conclude on Thursday, October 17. An IPO is a process in which a company offers its shares to the public for the first time to raise capital by listing on stock exchanges like the BSE (formerly Bombay Stock Exchange),  and the National Stock Exchange (NSE). This presents an opportunity for investors to purchase shares directly from the company before they officially get listed.

Understanding IPOs: Price band, lot size

When it comes to IPOs, investors encounter two key terms: price band and lot size. The price band is the range within which investors can bid for shares during the IPO process. This range is determined by the company and its underwriters based on various factors such as demand, market conditions, and company valuation.

 

In the case of the Hyundai Motor IPO, the price band is set at Rs 1,865 Rs 1,960, with a lot size of 7 shares. This means investors can place bids within this price range, and must apply for a minimum of 7 shares, or in multiples of 7.

Investment examples

For retail investors looking to participate in the Hyundai Motor India IPO, the minimum investment required would be Rs 13,720 (calculated as Rs 1,960 x 7 shares). Retail investors can bid for a maximum of 14 lots, equating to 98 shares, which would require an investment of Rs 1,92,080.

For Small Non-Institutional Investors (sNII), the minimum investment is higher, set at 15 lots or 105 shares, totaling Rs 2,05,800. On the other hand, Big Non-Institutional Investors (bNII) must invest in a minimum of 73 lots, or 511 shares, resulting in a total investment of Rs 10,01,560.

How to apply for Hyundai Motor India IPO
 

Investors willing to apply for the Hyundai Motor India IPO can do so in the following ways:

Through Brokerage: Most brokers provide online IPO applications for their account holders. To place a bid, investors should log into their trading account, navigate to the IPO section, and complete the required details.

   

ASBA (Application supported by blocked amount): Investors can also apply through their bank using the ASBA facility, where funds are blocked in their account until allotment.

Key considerations for investors

Before applying for an IPO, investors should evaluate several important factors, including:

Company fundamentals: Assess the company's financial health, growth prospects, and industry outlook.
 

Valuation metrics: Consider the issue size, price-to-earnings (P/E) ratio, and expected return on investment.

Market factors: Understand market volatility, regulatory risks, and subscription process details.

Grey market premium (GMP): The GMP refers to the price difference between the upper end of the IPO price band and the price at which the company's unlisted shares are traded in the grey markets. A GMP is often considered an indicator of market sentiment and demand, with a positive premium suggesting potential listing gains and a favourable market response.

With high demand often influencing the chances of allotment, especially for retail investors, it is important for the investors to conduct thorough research. IPO shares may list at a premium or discount based on various factors, making it crucial to review the company’s financial health, management, and future growth potential before applying.