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Hyundai Motor India is poised to make its debut on the Indian stock market, Dalal Street, on Tuesday. The company's Initial Public Offering (IPO), which opened on October 15th, has garnered considerable attention and witnessed a fluctuating level of investor interest. Despite initial hesitations, the IPO gained traction by its closing on October 17th, with an overall oversubscription rate of 2.37 times. Qualified Institutional Buyers (QIBs) demonstrated strong support, subscribing 6.97 times the offering, while retail investors and non-institutional investors (NIIs) exhibited a more cautious approach with subscription rates of 0.50 and 0.60 times respectively.
The grey market premium (GMP), an unofficial indicator of potential listing price, has shown some volatility. As of today, the GMP stands at Rs 75, implying a listing price of Rs 2,035 – a 3.83% premium over the issue price of Rs 1,960. This indicates a moderate listing gain, although some experts remain cautious regarding short-term gains due to the subdued GMP.
Experts offer mixed perspectives on the IPO's long-term prospects. While some express concerns about the projected slower growth in the passenger vehicle industry and Hyundai's limited presence in electric vehicles, others highlight the company's strong market position and its potential for future growth, particularly in the SUV and EV segments. Hyundai's leadership in the Indian passenger vehicle market, coupled with its strategic focus on electric vehicles, makes it an appealing investment for long-term investors. However, the listing performance might be 'flat-to-moderate' in the immediate aftermath of the IPO. Investors with a long-term outlook and the ability to navigate potential listing challenges may consider holding onto their investments post-listing.
Source: Hyundai IPO GMP improves slightly ahead of market listing. What to expect?