Hyundai IPO GMP improves slightly ahead of market listing. What to expect?

Hyundai stock market listing: The initial public offering, which opened on October 15, has seen a rollercoaster ride in terms of investor interest and grey market performance.

In Short

• Hyundai Motor India IPO set for debut on Dalal Street
• Grey market premium indicates a slight increase in stock market listing price
• Experts suggest flat-to-moderate listing, but strong long-term potential

Hyundai Motor India is all set for its debut on Dalal Street on Tuesday and investors are closely watching whether India's biggest initial public offering (IPO) will be able to defy expectations on listing day.

The initial public offering, which opened on October 15, has seen a rollercoaster ride in terms of investor interest and grey market performance.

The Hyundai IPO, initially met with hesitation, gained significant traction by its close on Thursday, October 17. The offering was oversubscribed 2.37 times overall, with Qualified Institutional Buyers (QIBs) leading the charge with a subscription rate of 6.97 times. However, retail investors and non-institutional investors (NIIs) remained cautious, with subscription rates of 0.50 and 0.60 times respectively.

GMP REBOUNDS AHEAD OF LISTING

The grey market premium (GMP), an unofficial indicator of potential listing price, has shown some volatility. As of today, the GMP stood at Rs 75, suggesting a listing price of Rs 2,035 – a 3.83% premium over the issue price of Rs 1,960.

Experts have expressed mixed views on the IPO's prospects.

While some highlight concerns such as slower growth projections for the passenger vehicle industry and Hyundai's limited presence in electric vehicles, others pointed at the company's strong market position and long-term growth prospects, particularly in the SUV and EV segments.

Master Capital Services said, “Hyundai Motor India, is the second-largest automobile manufacturer in India, holding a 15% market share. Despite some concerns regarding short-term listing gains due to subdued grey market premium, the company offers steady growth prospects amid industry tailwinds, robust financials and healthy SUV product demand. Hyundai’s leadership in India's passenger vehicle market, along with its strategic focus on electric vehicles makes a compelling investment for long-term investors.”

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, indicated that the IPO could witness a “flat-to-moderate” listing. However, she added that “investors with a long-term outlook and the ability to navigate potential listing challenges may consider holding onto their investments post-listing”.

“In conclusion, we anticipate a steady debut, and while immediate listing gains may be modest, Hyundai’s robust fundamentals make it an attractive long-term investment,” Nyati noted.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)