Hyundai Motor India’s shares are set to debut on the stock exchanges today, October 22, following a Rs 27,870-crore IPO that experienced a lukewarm response from retail investors. However, the strong demand from Qualified Institutional Buyers (QIBs), which led to a subscription rate of 6.97 times, has bolstered overall interest in the offering.
Analysts highlight Hyundai’s robust position as the second-largest passenger vehicle manufacturer in India, noting its strategic emphasis on SUVs, which bodes well for future growth. Despite this, the broader market sentiment and the large size of the IPO may limit any significant gains on its debut.
Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares and Stock Brokers, suggested that the shares might list at or near the IPO price. He encouraged long-term investors who missed the IPO to consider entering during the listing day, especially if market conditions present favorable buying opportunities.
Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, advised investors with a long-term perspective to hold their investments post-listing, anticipating potential growth despite initial listing challenges. However, Prashanth Tapse, Senior VP Research Analyst at Mehta Equities Ltd, cautioned that sluggish demand from non-institutional investors and concerns about overvaluation could lead to a flat or negative debut.
The grey market premium indicates a potential discount upon listing on the BSE and NSE. Nevertheless, analysts believe Hyundai’s leadership in the passenger vehicle sector, combined with its strategic focus on electric vehicles, positions it well for long-term investment.
With a market share of 15%, Hyundai Motor India remains a key player in the industry. The IPO, priced between Rs 1,865 and Rs 1,960 per share, was entirely an Offer for Sale (OFS), meaning the company will not receive any proceeds from the issue.
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