Stock price will be determined by investors, says Tarun Garg on weak Hyundai Motor India listing

Garg in a media interaction added that the size of the issue reflects the strong interest the company was able to generate from investors. 

Hyundai Motor India's issue attracted strong interest from sovereign funds, insurance companies, and mutual funds. However, the stock price will ultimately be determined by investors, said Tarun Garg, chief operating officer of Hyundai Motor India on the back of a weak stock listing on the bourses.

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 of Rs 1,960 on the National Stock Exchange (NSE). At 2:50 pm, the stock was trading 6.83 percent lower at Rs 1,826.2 on the NSE.

Garg, in a media interaction, added that the size of the issue reflects the strong interest the company was able to generate from investors.

Brokerage firm Emkay Global Financial Services initiated coverage on Hyundai Motor India with a 'reduce' rating citing lack of major launches, higher royalty, and lower treasury income as reasons. All of this put together is expected to restrict earnings per share (EPS) growth moving ahead, said the brokerage firm.

While Macquarie has assigned an 'outperform' rating on the stock citing its diverse product portfolio and premium market positioning, which supports a higher P/E multiple compared to competitors. The brokerage firm said that Hyundai Motor India is well-positioned for medium-term growth because of a potential market share growth from upcoming launches.

Demand from retail investors for the biggest-ever IPO by issue size was subdued. At the third day, Hyundai Motor India IPO was oversubscribed by 2.37 times. In this, qualified institutional buyer (QIB) subscription was at 6.97 times. The non-institutional investors (NII) witnessed a 60 percent booking, while the retail portion was booked at 50 percent.

The Rs 27,870-crore  Hyundai IPO is the largest in the country, surpassing LIC's Rs 21,000-crore issue size.