In what is termed the biggest Initial Public Offer (IPO) on the Indian equity markets, Hyundai Motor India will begin its public offer today, October 15. As we usher into the three-day-long IPO 'festivity' which will conclude on October 17, the automobile company has reportedly raised a whopping Rs 8,315 crore through anchor investors.
Hyundai Raises Rs 8,000 Crore
The motor company raised this massive sum from 225 anchor investors. This Rs 27,870 crore IPO of the carmaker is the largest ever offering in the country.
Myriad global investors such as Blackrock, Aegon Investment Management, Schroder, JP Morgan, Goldman Sachs and others have become a shareholder in the car company. | Erik McGregor / Contributor / Getty Images
Anchor Investors Pour In
Myriad global investors such as Blackrock, Aegon Investment Management, Schroder, JP Morgan, Goldman Sachs, Copthall Mauritius, Societe Generale, Morgan Stanley, Citigroup Global, Abu Dhabi Investment Authority, HSBC Global Canada Pension Plan Investment Board, Eastspring Investments, Moorea Fund, City of New York Group Trust, Baillie Gifford, and Vanguard also became shareholders in passenger vehicle makers via anchor book.
Here, anchor investors are a set of qualified investors or qualified institutional buyers (QIB).
These entities buy a significant amount of shares in the company before it goes public/gets listed on the stock exchanges. This is usually done to instill confidence and encourage investors in the market by encouraging them to invest in the newly listed companies.
Anchor investors are allowed up to 60 per cent of the issue portion available for Qualified Institutional Bidders (QIB).
The Hyundai Motors Company's Indian chapter's IPO has a price band of Rs 1865 to Rs 1960 per share, with a face value of Rs 10. | Freepik
Hyundai IPO
Anchor investors in general are reputable institutional investors, from mutual funds, pension funds, and insurance companies.
The Hyundai Motors Company's Indian chapter's IPO has a price band of Rs 1865 to Rs 1960 per share, with a face value of Rs 10. This IPO has a lot size of 7. Here the total issue size stands at 142,194,700, amounting to the sum of Rs 27,870.16 crore.
The minimum amount of retail investors is Rs 13,720.
The company, with its roots in Korea, has grown to become a force to reckon with in the ever-competitive and price-sensitive Indian auto market. In fact, in the recent auto sales data for the month of September, Hyundai came in second behind Maruti Suzuki and just ahead of Mahindra and Mahindra with the sale of 64,201 units.
