Hyundai Motor India's Rs 27,870-crore IPO drew bids for more than twice the shares on offer on the last day of bidding on October 17, with investors seeking 23.63 crore equity shares against 9.98 crore on offer, according to NSE data. It is scheduled to be listed on the exchanges on October 22.
The subscription details showed robust institutional demand, with the qualified institutional buyer (QIB) segment bidding for 6.97 times the shares on offer.
The demand from retail investors remained sluggish as there were concerns over high valuation, fall in grey market premium of shares and overall weak demand in the auto sector during the festive seasons, an Indian Express report said quoting analysts.
G Chokkalingam, Founder & Head of Research, Equinomics Research Private Ltd told the publication that the weak demand from retail investors was because such large issues in the past have turned out to be a disappointment after listing.
The other factor was the drop in sales of passenger vehicles. "The SUV (sport utility vehicle) segment, which is the focus area of Hyundai Motor India, used to grow in strong double-digit earlier but now the segment is growing in the single-digit," he said.
Market analyst Ambareesh Baliga said that some days before the subscription started, the company announced the final numbers of the shares to be issued, and so it was expected that the IPO would be Rs 25,000 crore. "With the final IPO size of around Rs 28,000 crore, the pricing became 11-12 per cent higher than what was expected. Due to this, the grey market price of the IPO also crashed," he added.
Also Read | Hyundai IPO subscribed 2.37x on last day of sale; QIBs lead with 7 times subscription
Hyundai IPO GMP dropped below 1 percent on the last day of bidding on October 17. According to multiple platforms that track the grey market premium activities, the shares of Hyundai India are commanding a GMP in the price range of Rs 14 over the IPO price, indicating a flat 0.71 percent premium listing on October 22.
Hyundai Motor India is the second largest auto OEM (original equipment manufacturer) in the Indian passenger vehicles segment with nearly 15 percent market share, after Maruti Suzuki India. Its domestic market share declined from 17.6 percent in FY20 due to competition from domestic peers like Maruti Suzuki India, Tata Motors and Mahindra & Mahindra.
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