Does not make any sense. It's like that time they tried to squeeze in an 'i40' saloon in between the Elantra (i30) and the Sonata (i45). It's a niche too far.
This would be great if it was less than 4m long, but looking at the pictures, unless it is currently 4001mm long, there's no way they could trim it down without extensive re-engineering.
The problem is the Verna and the i20, obviously. How do they price it significantly lower than the former, but higher than the latter? Hyundai has a habit of offering too many variants, and people now equate Hyundai with 'equipment'. So they cannot make the HB20S a 'stripped out' car; no one will touch it.
The only solution seems to be to kill off the two base engines of the Verna (the 1.4 petrol and diesel) and leave only the 1.6es, those seem to be the really popular ones anyway. Since the HB20 isn't sub-4m, they could happily put these engines in here.
It won't be as cheap as the Amaze and Dzire, but it could rattle up the Verito, Sail, Etios and Manza side of the market.