Hyundai IPO: QIBs rescue India's biggest-ever offer

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Subscribe to enjoy similar stories. The success of India's biggest-ever initial public offering from Hyundai Motor India Ltd came down to one key factor: a strong response from qualified institutional buyers (QIBs). But the portion set aside for retail investors, who have been driving demand in the primary market this year, wasn't even fully subscribed.

QIBs, or large institutions, put in bids for 6.97 times the shares set aside for the category, according to the final subscription data on NSE. Muted enthusiasm from retail investors—bidding up to ₹2,00,000—meant the subscription for the category lagged at just 0.5 times. The portion allocated to non-institutional investors, who put in bids ranging from ₹2,00,000 to ₹10,00,000, was subscribed 0.65 times.

What's striking is how the grey market premium nosedived. “The grey market premium when Hyundai Motor India announced their IPO was ₹1,001 and has now tumbled to merely ₹10," said Krishna Patwari, founder of Wealth Wisdom of India, an online platform that facilitates trading in unlisted, pre-IPO, and delisted shares. This drastic decline suggests that expectations for listing gains are minimal, which likely explains the lack of interest from retail investors.

Overall, the issue was subscribed 2.37 times. The unsold shares of retail and non-institutional categories would be offered to the QIBs. Read more: Afcons Infra cuts offer size to ₹5,400 cr after raising ₹3,000 cr before IPO When retail investors put money into an IPO, they often rely on the grey market premium to understand possible listing gains, which is typically based on the higher end of the IPO price band, he said.