Wed Oct 16 08:16:58 UTC 2024: ## Hyundai Motor India IPO Opens to Lukewarm Response
**New Delhi, October 17, 2023:** The highly anticipated initial public offering (IPO) of Hyundai Motor India opened for subscription on October 15, aiming to raise a record-breaking Rs 27,856 crore. However, investor enthusiasm has been muted so far, with only 22% of the IPO subscribed as of October 16.
The share price was fixed between Rs 1,865 and Rs 1,960 per share, making it the largest IPO in India’s history and the first by an automaker since Maruti Suzuki in 2003.
Despite the massive size and historical significance, subscription levels remain low across all categories, including retail, Qualified Institutional Buyers (QIB), and Non-Institutional Investors (NII). The grey market premium (GMP), an indicator of potential listing gains, has also cooled significantly, currently standing at Rs 40, reflecting a modest 2.04% premium over the issue price.
While Hyundai’s strong market position and financial stability have attracted some optimism from brokerages like ICICI Direct and Jefferies, analysts are cautious about short-term gains. The high price-to-book value ratio of 13.11 times, compared to Maruti Suzuki’s 4.79 times, and the large IPO size, which may result in a limited price surge after listing, are concerns.
Furthermore, the promoter’s planned stake sale, totaling 25% within three years, could create selling pressure and impact short-term returns.
Despite these concerns, some brokerages remain bullish on Hyundai’s long-term prospects, citing the company’s consistent profitability, dividend history, and growth plans, including capacity expansion, new product launches, and a focus on premiumization.
Investors considering participation in the IPO are advised to consult with a qualified broker or financial advisor before making any decisions, as the IPO is considered fully priced and may not offer significant short-term gains.
First Piper 