Hyundai IPO: Check latest subscription and GMP on Day 1

Hyundai Motor India IPO: India's biggest public offering opened for subscription on Monday, looking to raise Rs 27,870.16 crore with an offer for sale of 14.22 crore shares.

In Short

• Hyundai Motors India's IPO sees slow start with low retail interest
• Subscription rates are low across all investor categories
• Grey market premium drops to Rs 40, indicating modest sentiment

The initial public offering (IPO) of Hyundai Motors India has got off to a slow start with the subscription for the public issue having seen muted interest from retail investors.

India's biggest public offering opened for subscription on Monday, looking to raise Rs 27,870.16 crore with an offer for sale of 14.22 crore shares. The price band for Hyundai Motor IPO is set at Rs 1,865 to Rs 1,960 per share and requires a minimum of 7 shares for applying.

The Hyundai Motor IPO saw a subscription rate of 0.11 times. As of 12:37 PM on October 15, 2024, the public issue had been subscribed 0.18 times in the retail segment, 0.00 times in the Qualified Institutional Buyers (QIB) category, and 0.08 times in the Non-Institutional Investors (NII) category.

LATEST GMP

As of today, the grey market premium (GMP) for Hyundai's stock is at Rs 40, reflecting a modest 2.04% premium over the issue price. This is a significant drop from the Rs 570 GMP seen just two weeks ago. While the grey market sentiment is often seen as an early indicator of listing performance, it is important to note that GMP can be volatile and should not be the sole factor driving investment decisions.

The Hyundai IPO is open for subscription starting today and will close on October 17. Retail investors, qualified institutional buyers (QIBs), and non-institutional investors (NIIs) can all participate in the IPO. Hyundai's IPO is expected to attract significant investor interest due to the company’s strong market presence and financial performance.

HYUNDAI’S MARKET POSITION

Hyundai is a dominant force in India's automotive sector, boasting a 14.6% market share. The company's manufacturing facilities in Chennai have a combined production capacity of 8.24 lakh units and are currently operating at over 90% capacity. Hyundai's product lineup includes 13 models, with SUVs like the Creta and Venue playing a pivotal role in its success.

SHOULD YOU SUBSCRIBE?

Several brokerage firms have provided positive recommendations for Hyundai's IPO, citing the company's solid market position, robust financials, and growth potential. ICICI Direct, Bajaj Broking, and SBI Securities have all advised investors to subscribe, especially those with a long-term investment horizon. Hyundai's valuation, pegged at 26.3 times its FY24 earnings at the upper end of the price band, is seen as competitive when compared to rivals like Maruti Suzuki, which trades at 29 times FY24 earnings.

LKP Securities and Anand Rathi have echoed these sentiments, highlighting Hyundai’s strong standing in the Indian automotive landscape, particularly in the SUV segment. They recommend subscribing to the IPO with a focus on long-term gains, given the company's potential to maintain its leadership position and grow its electric vehicle portfolio.

Master Capital Services Ltd also noted that Hyundai's growth trajectory aligns well with the projected 4.5-6.5% CAGR for the domestic passenger vehicle (PV) industry. They suggest that investors consider subscribing, especially those looking for a long-term play in the auto sector.

(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.)