Banks Advising Hyundai On Its India IPO Set To Get $40 Million In Fees

New Delhi: Investment banks advising Hyundai Motor's Indian unit on its initial public offering (IPO) will get nearly USD 40 million as fees, making it the second-highest IPO-fee, as per media reports.

A report in the Reuters news agency has said that Hyundai India "will pay banks, including JPMorgan, Citigroup and HSBC, 1.3% of the IPO size".

Banks in India get between 1% and 3% of an IPO size as fees, while for an IPO worth about $3 billion the bank's fee  in New York would be 3%-3.5%, and 2%-3% in Hong Kong, Reuters added.

The South Korea's leading carmaker had a couple of days ago in a regulatory filing that its India unit submitted IPO documents to an Indian regulator to raise around $3 billion (Rs 25,000 crore).

Hyundai Motor India filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an IPO.

“The objects of the offer are to carry out the Offer for Sale of up to 142,194,700 (over 142 million) Equity Shares of the face value of Rs 10 each by the Promoter Selling Shareholder and to achieve the benefits of listing the Equity Shares on the Stock Exchanges," according to the DRHP.

Further, "our Company expects that listing of the Equity Shares will enhance our visibility and brand image and provide liquidity and a public market for the Equity Shares in India," Hyundai Motor India’s DRHP added.

If the listing gets the nod from the regulator, it will be the country’s biggest IPO (a pure offer for sale by the promoter) after the state-owned Life Insurance Corporation of India’s (LIC) $2.7 billion listing in 2022.

With IANS Inputs