Hyundai Motor India shares made a weak debut on the exchanges on October 22 after listing at 1.32 percent discount at Rs 1,934 against its initial public offer (IPO) price Rs 1960 on the NSE.
Hyundai Motor India, the Indian subsidiary of the South Korean automaker, saw a muted retail response to its initial share sale. However, strong demand from Qualified Institutional Buyers (QIBs) compensated for this, with the QIB portion being oversubscribed by nearly 700 percent, or 6.97 times.
Hyundai GMP indicates muted listing, analysts advise waiting for better entry
The company’s IPO, the largest in India’s history, also experienced significant volatility in its grey market premium (GMP). According to platforms tracking GMP trends, the premium for Hyundai Motor India's shares dropped sharply into negative territory last week, after hitting a high of Rs 570 in late September.
On the day of listing, the shares were commanding a GMP in the price range of Rs 62, indicating a nearly 3 percent premium.
The stock listed at Rs 1,931, reflecting a decline of 1.47 per cent from the issue price on the BSE. Later, the stock made some recovery and hit a high of Rs 1,968.80, up 0.44 per cent. But, the stock again declined 0.74 per cent to trade at Rs 1,945.40.
At the time of publishing, the Hyundai India stock was trading at Rs 1,862.70, down 3.69 percent at 10.25 AM.
The company's market valuation stood at Rs 1,51,352.03 crore on the NSE.
The initial public offer of Hyundai Motor India Ltd got subscribed 237 percent on the last day of the bidding on Thursday, helped by institutional buyers.
This was the largest IPO in the country, surpassing LIC's initial share sale of Rs 21,000 crore. The Rs 27,870 crore initial share sale had a price band of Rs 1,865-1,960 per share.
HMIL commenced operations in India in 1996 and currently sells 13 models across segments.
Emkay Institutional Equities has initiated coverage on Hyundai Motor India (HMIL) with REDUCE call. It has give a target price of Rs 1,750 per share.
"While MSIL (REDUCE) also faces similar near-term growth challenges, we prefer it over HMIL given its catch-up on operational and financial metrics (even on lower SUV mix) with a much diversified product and powertrain mix and a higher growth optionality," the analysts said.
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