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Hyundai Motor India is poised to make its debut on the Indian stock market, Dalal Street, on Tuesday. This marks a significant event as it is the largest Initial Public Offering (IPO) in India, and investors are eager to see whether it will meet expectations. The IPO journey has been marked by fluctuations in investor interest and grey market performance.
Initially, the IPO faced some hesitation but garnered substantial traction by its closing on Thursday, October 17. The offering was oversubscribed by 2.37 times, with Qualified Institutional Buyers (QIBs) displaying strong enthusiasm, subscribing 6.97 times the allotted shares. However, retail investors and non-institutional investors (NIIs) remained cautious, with subscription rates of 0.50 and 0.60 times respectively.
The grey market premium (GMP), an informal indicator of potential listing price, has experienced volatility. As of today, the GMP stands at Rs 75, suggesting a listing price of Rs 2,035, a 3.83% premium over the issue price of Rs 1,960.
Expert opinions on the IPO's prospects are mixed. Some raise concerns about slower growth projections for the passenger vehicle industry and Hyundai's limited presence in electric vehicles. Others highlight the company's robust market position and long-term growth prospects, particularly in the SUV and EV segments.
Master Capital Services sees Hyundai Motor India as the second-largest automobile manufacturer in India with a 15% market share. Despite concerns about short-term listing gains due to the subdued grey market premium, they believe the company offers steady growth prospects amidst favorable industry conditions, strong financials, and robust SUV product demand. Hyundai's leadership in the Indian passenger vehicle market, coupled with its strategic focus on electric vehicles, makes it an attractive investment for long-term investors.
Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, predicts a 'flat-to-moderate' listing for the IPO. However, she advises investors with a long-term perspective and the ability to navigate potential listing challenges to consider holding onto their investments after the listing. She concludes that while immediate listing gains might be modest, Hyundai's solid fundamentals make it a compelling long-term investment opportunity.
The IPO's performance on listing day will be closely watched by investors and the market. The factors discussed above will likely influence the IPO's success and its future trajectory.
Source: Hyundai IPO GMP improves slightly ahead of market listing. What to expect?