Hyundai Motor India, one of the country’s largest automobile manufacturers, is making its debut on the NSE and BSE today, October 22, 2024. After closing its IPO subscription on October 17, the company has set high expectations for investors, given its prominent market position. However, market experts are predicting a flat debut for Hyundai shares based on Grey Market Premium (GMP) trends and subscription data.
This article covers the key details investors need to know about Hyundai’s stock market debut and expert views on whether it will be a strong performer or a slow starter.
Hyundai IPO Subscription Recap
Hyundai’s IPO, valued at ₹27,870.16 crore, is India’s largest public offering to date. The IPO was entirely an offer for sale (OFS) of 14.22 crore shares, meaning the company itself will not receive any proceeds from the offer. The price band for the IPO was set between ₹1,865 to ₹1,960 per share.
Despite being highly anticipated, the IPO subscription saw mixed demand across different investor categories:
- Qualified Institutional Buyers (QIBs): Subscribed 6.97 times
- Retail Investors: Subscribed 0.50 times
- Non-Institutional Investors (NIIs): Subscribed 0.60 times
While the QIB segment showed strong interest, retail and NII segments were under-subscribed, reflecting a tepid overall response from smaller investors.
Grey Market Premium (GMP) and Expected Listing Price
Ahead of its listing, Hyundai Motor India’s Grey Market Premium (GMP) was fluctuating between ₹65 to ₹70 per share, indicating modest optimism among investors. This translates to an estimated listing price of around ₹2,025-2,030 per share, a slight premium of 3.5% over the issue price.
However, analysts are cautioning investors against expecting quick gains on listing day. Prashanth Tapse, Senior VP of Research at Mehta Equities Ltd, noted that concerns over high valuation and sector-specific challenges could dampen enthusiasm. “We recommend holding onto the shares as Hyundai’s long-term growth story remains intact, but short-term gains may be limited,” he said.
Expert Opinions on Hyundai’s Stock Market Debut
While the GMP suggests a modest premium, experts have mixed opinions on the stock’s performance post-listing. Nomura initiated coverage of Hyundai Motor India with a Buy rating and a target price of ₹2,472, representing a 26% upside. Nomura’s optimism is based on Hyundai’s strong product lineup and its growing focus on electric vehicles (EVs) and SUVs.
Macquarie is slightly more conservative, with an Outperform rating and a target price of ₹2,235, implying a 14% upside. Macquarie believes Hyundai Motor India will benefit from its premium positioning and the ongoing demand for SUVs, but notes that sector headwinds could affect short-term performance.
Hyundai IPO Key Listing Details
| Details | Information |
|---|---|
| Issue Price | ₹1,960 per share |
| GMP (Grey Market Premium) | ₹65-70 per share |
| Expected Listing Price | ₹2,025-2,030 per share |
| Listing Date | October 22, 2024 |
| Subscription (QIB) | 6.97 times |
| Subscription (Retail) | 0.50 times |
| Subscription (NII) | 0.60 times |
Should You Hold or Sell on Listing Day?
Given Hyundai’s strong brand and market position, most analysts recommend holding the stock post-listing, even though short-term gains may be limited. Hyundai’s focus on technology, premium models, and electric vehicles positions it well for long-term growth. Investors are advised to wait for market stabilization before deciding about selling or adding to their positions.
Shivani Nyati, Head of Wealth at Swastika Investment, pointed out that Hyundai’s IPO valuation is fully priced, which may limit listing gains. However, she believes the company’s robust market fundamentals make it a good long-term investment. “While retail investors may not see quick returns, those with a long-term horizon should consider holding their shares,” she said.
Conclusion: Hyundai’s Long-Term Growth Potential
While Hyundai’s IPO debut may not provide spectacular short-term gains, the company’s long-term prospects remain bright. As the second-largest player in India’s passenger vehicle market with a strong focus on electric and premium vehicles, Hyundai Motor India is well-positioned to benefit from the ongoing evolution of the automobile sector. For investors looking beyond the immediate volatility, Hyundai’s growth story remains compelling.
Disclaimer
The stock market is subject to risks, and it is recommended to consult financial advisors before making investment decisions.
