As Hyundai drives into Dalal Street, meet the i-bankers behind India's biggest  IPO

The firm's shares declined post the record debut on October 22 only to rebound smartly a day later.

What's common between sacred city Ayodhya and India's number 2 carmaker Hyundai

Stumped?

Well, to know the answer, read on as we share takeaways of an exclusive and candid interaction with the investment bankers who advised on the country's biggest ever IPO, the $3.3 billion issue by Hyundai Motor India, which targeted a valuation of $19bn.

The firm's shares declined post the record debut on October 22 only to rebound smartly a day later.

Citi, HSBC Securities, JP Morgan, Kotak Mahindra Capital and Morgan Stanley acted on the precedent setting transaction, and we quizzed their dealmakers on the transaction journey, key learnings, memorable moments and the impact of the record listing on MNC strategy. When contacted, Morgan Stanley declined to comment. Below are the edited excerpts.

"Working 3 months ahead of the appointment of any other bank to conceptualize and work through great detail and to build consensus of what it means for a large MNC to IPO in India.  From process and timelines, from disclosures to book building mechanics, from sustainable market dynamics to global framework agreements: a great deal of detailed work was done all round, including preparing presentations for the board to take a final decision to go ahead based on merits," says Rahul Saraf, Head of Investment Banking, Citi India.

Amitabh Malhotra, Head ( Global Banking), HSBC India adds, " One of the most demanding aspects was ensuring seamless coordination among multiple stakeholders across different geographies which required meticulous planning and consistent communication between HMI, HMC, BRLMs along with various other intermediaries in the transaction. The successful listing is a testament to the collaborative effort, expertise and dedication of everyone involved"

According to Malhotra, "The biggest take way for me professionally is the importance of planning, clear communication and razor- sharp focus on execution. In such a dynamic environment, where market conditions change rapidly, staying agile and responsive is crucial."

Remember the Ayodhya-Hyundai question we posed at the beginning?

Well, Saraf demystifies the connection.

"When talking to the HMI India CEO, we got talking about Indian mythology.  I then learned that Mr Unsoo Kim has ancestral linkage to Ayodhya.  I was very surprised and also impressed with the strong roots of Hyundai in India not just as a corporate but also for its CEO," he told Moneycontrol.

That's not all , he has another nugget for us.

"For a morning meeting at 8:30 am, where I was to open the meeting, I was late by 4 minutes.  The meeting had started without me.  That is the punctuality embedded in Hyundai culture," Saraf shares adding that the incident left a lasting impression.

Kaushal Shah, MD and Head ( Equity Capital Markets), Kotak Investment Banking recollects - " The project team of Hyundai was very meticulous and detail oriented, to the extent that , they were brimming with curiosity and questions regarding every step. Consequently, it made us refresh the nuances of regulations and intricacies of the process, as the discussions went very deep into the rationale and spirit of the IPO exercise."

Navin Wadhwani, MD and India Head of Investment Banking, JP Morgan believes, "Listing of HMI, the largest IPO in India ever and the largest IPO globally till date in 2024, is a big positive for MNCs to seriously consider listing of their Indian subsidiaries.  It just shows that Indian markets are deep, broad and absolutely willing to embrace listing of large size, high quality businesses."

"MNCs with India subsidiaries with strong India growth story combined with Make in India for India and for the world is very positively received by investors," he adds.

Malhotra is equally optimistic and feels the $ 3.3bn raised through the HMI IPO demonstrates the attractiveness of the Indian equity market and reinforces the belief of long term foreign and local investors in owning high quality equity stories with strong governance, multiple levers of growth, coupled with predictable cash flows and return profiles.

"As a global conglomerate, Hyundai Group, listing its India business, clearly highlights the trust of global multi nationals in the Indian regulatory landscape and is a historic moment in the Hyundai Group’s journey to be a key part of the financial ecosystem in India. The response to this deal in a volatile market demonstrates the depth and resilience of the Indian market to successfully complete scale deals," he elaborates.

Meanwhile, Saraf feels the issue sets an example of what can be done.

"India market is unique and provides a unique opportunity for MNCs to consider India listing and embrace Indian growth and markets with both hands," he adds.

Shah calls the Hyundai IPO a trendsetter for many MNC's.

" Several overseas companies have started firming up their plans to list their India subsidiaries. Some of them are flipping their offshore corporate entities into India and a few are bringing their global businesses under the India entity, with an intent to list the India entity," he shares.

Wadhwani of JP Morgan says, "One will continue to see MNCs across sectors considering potential listing of Indian subsidiaries.  Specific sectors like consumer, industrial and engineering will likely see relatively more activity around this thematic."

Malhotra is also betting on consumer products and the retail sector as strong contenders due to the demographic profile of India, rapid increase in disposable income and other factors.

"Given the increasing focus of the government on ‘Make in India, we believe the wider Industrial sector including companies involved in manufacturing and allied infrastructure will also be a focus sector from an international issuer fund raising perspective," Malhotra concludes.

Saraf told Moneycontrol, "We have very large global companies having good profitable presence in the country.  It’s not an opportunistic event, it’s a strategic event for a company.   We are mandated on three others MNC IPOs, each of them in different sectors and different continents (Asia, Europe and the US).  There is a long list of high-quality names who are actively considering and will be enthused by what Hyundai has done."