Hyundai IPO set for muted stock market debut on BSE, NSE

The IPO, which opened on October 15, faced a slow start, particularly from retail investors, who subscribed to just 50% of their allotted shares.

In Short

• Hyundai Motor India lists shares at modest 2.45% premium
• Analysts see long-term growth despite subdued market debut
• Concerns over Hyundai's limited EV portfolio and market competition

Hyundai Motor India is set to make its stock market debut today with shares expected to list at Rs 2,008, a modest 2.45% premium over its IPO price of Rs 1,960, based on a grey market premium (GMP) of Rs 48. While GMP is not a reliable predictor of market performance, analysts are forecasting a subdued start due to several headwinds, including market volatility and Hyundai’s high valuation.

The IPO, which opened on October 15, faced a slow start, particularly from retail investors, who subscribed to just 50% of their allotted shares. This marked one of the weakest retail responses among recent major IPOs. However, institutional investors helped rescue the offering, with Qualified Institutional Buyers (QIBs) subscribing nearly seven times their share, pushing overall subscription to 2.37 times by its close on October 17. Non-institutional investors also remained cautious, subscribing just 60% of their allocation.

KEY CONCERNS

Market experts highlight Hyundai’s limited presence in electric vehicles (EVs) and hybrids, which comprise only 11% of its portfolio, as a major drawback in a rapidly shifting automotive landscape. Hyundai’s limited production capacity and a lack of new model launches also weigh on the company’s immediate outlook. Chief Investment Officer of Equentis, Jaspreet Singh Arora, pointed to Hyundai’s struggles in a highly competitive market, where aggressive pricing and incentives are common.

Arora noted that large IPOs like Paytm and LIC have historically seen weaker listings, partly due to regulatory requirements for promoters to reduce their stakes.

DIVERSE VIEWS ON HYUNDAI'S FUTURE

While short-term prospects appear dim, some analysts are optimistic about Hyundai’s long-term growth. Nuvama Wealth Management and ICICI Direct highlight Hyundai’s strong market presence and future capacity expansion plans as potential drivers of profitability. Choice Equity Broking has advised investors to take a long-term view, citing Hyundai’s strategy of premiumisation and its expansion into new markets.

With a 15% share of India’s passenger vehicle market and a dominant 63% share of its utility vehicle sales, Hyundai’s long-term growth potential remains strong, even if today’s market debut proves lackluster.