Hyundai Motor India’s initial public offering (IPO) is in its third and final day of subscription, with demand remaining subdued. The IPO, which opened on October 15, 2024, offers shares in a price band of ₹1,865 to ₹1,960 per equity share.
Despite the strong brand and market position of Hyundai in India’s passenger vehicle (PV) sector, the IPO has not seen the overwhelming demand expected, leaving potential investors to wonder if they should apply.
Subscription Status as of Day 3
As of October 17, 2024, the third day of bidding, Hyundai Motor India’s IPO had been subscribed only 0.43 times. The retail portion of the IPO is subscribed at 0.40 times, the non-institutional investor (NII) category at 0.27 times, and the qualified institutional buyers (QIB) portion at 0.58 times.
Despite Hyundai’s strong reputation as a leading automobile manufacturer in India, the slow subscription uptake reflects cautious investor sentiment, possibly due to the high valuation of the issue.
| Subscription Category | Subscription Rate (Day 3) |
|---|---|
| Retail Investors | 0.40 times |
| Non-Institutional Investors | 0.27 times |
| Qualified Institutional Buyers | 0.58 times |
| Total Subscription | 0.43 times |
Grey Market Premium (GMP)
Hyundai Motor India’s grey market premium (GMP) has also remained muted. As of today, the shares are trading at a premium of only ₹17 in the grey market. This suggests that the stock is likely to list at around ₹1,977, representing a premium of just 0.87% over the upper IPO price band of ₹1,960.
| IPO Price Band | Grey Market Premium | Estimated Listing Price |
|---|---|---|
| ₹1,865 – ₹1,960 | ₹17 | ₹1,977 |
This relatively flat GMP signals a lack of strong interest in the grey market and may reflect investor caution about Hyundai’s valuation.
Check out how Pranik Logistics performed in its IPO debut.
Should You Apply?
Despite the lukewarm subscription and low GMP, many market experts still see potential in Hyundai Motor India’s long-term prospects. The company has a strong foothold in India’s passenger vehicle (PV) market, with a market share of over 15%.
Thanks to its robust manufacturing base, it is also one of the leading exporters of PVs from India.
Experts have highlighted the following key points
- Growth Prospects: The Indian PV industry is expected to grow at a compound annual growth rate (CAGR) of 4.5% to 6.5%, driven by rising disposable incomes and a growing middle class. Hyundai’s focus on premiumization, electric vehicles (EVs), and expanding its passenger vehicle portfolio bodes well for future growth.
- Valuation Concerns: At the upper price band of ₹1,960, Hyundai Motor India is valued at a price-to-earnings (P/E) ratio of approximately 26 times its FY24 earnings per share (EPS). While this valuation is comparable to peers like Maruti Suzuki, it leaves limited room for significant short-term gains, particularly in the current market climate.
- Long-Term Potential: Hyundai’s strong market presence, ongoing product innovation, and plans to expand its EV portfolio make it a solid long-term investment. Analysts from Master Capital Service recommend subscribing for the long term, citing Hyundai’s ability to maintain its competitive edge.
Conclusion: Final Verdict on Hyundai Motor India IPO
If you are a long-term investor who focuses on well-established brands and future growth in the Indian automotive industry, Hyundai Motor India could be a worthwhile addition to your portfolio.
However, the muted grey market premium and slow subscription rates may be a deterrent for short-term investors looking for significant listing gains.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor before making investment decisions.
Wondering how AI is transforming financial markets? Discover how AI is reshaping trading and investing.
