Hyundai Motor India Limited (HMIL) is set to launch India’s largest IPO without reserving shares or offering discounts to its 5,500 employees. This contrasts with traditional practices where companies often provide such benefits to encourage employee participation and loyalty.
HMIL plans to offer 142.2 million shares at Rs 10 each, resulting in a 17.5% stake dilution by its promoter, Hyundai Motor. The IPO will allocate 50% to qualified institutional buyers, 35% to retail investors, and the remainder to non-institutional investors.
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Previous large IPOs, like LIC’s Rs 21,000 crore offering, reserved shares for employees and offered discounts. Other companies like Coal India and SBI Cards have also provided similar incentives, demonstrating a common practice among public sector entities to engage employees through financial benefits.
Unlike HMIL, companies like Paytm and Zomato have adopted different approaches. Paytm offered ESOPs prior to its IPO, while Zomato reserved shares for employees, though only 62% of these were subscribed, indicating varying levels of employee interest in IPO participation.
Market reactions to IPOs have been mixed. LIC’s shares debuted at a discount and traded significantly lower before recovering, while Paytm’s shares remain substantially below their issue price since their market debut, highlighting the risks and volatility associated with IPO investments.
