Hyundai's Rs 27,870 cr IPO highlights how mega listings affect markets

Hyundai Motor India’s Rs 27,870 crore IPO — India’s largest-ever — has turned the spotlight on the performance of mega offerings in the domestic markets and their impact on the overall markets. An analysis done by Bloomberg shows large offerings tend to weigh on the perfor­mance of the overall markets. For instance, the benchmark Nifty 50 index had declined 3 per cent one month after the Rs 20,557 crore IPO of state-owned Life Insurance Corporation of India (LIC). 

Similarly, the index crashed 5 per cent following Paytm’s Rs 18,300 crore IPO in November 2021, the biggest back then. Experts attribute this phenom­enon to large IPOs absorbing market liquidity, subsequently weighing on the overall market performance. Furthermore, the post-listing performance of most of the large IPOs has been underwhelming. Hyundai’s grey market premium suggests a listing price close to its issue price, potentially indicating a lukewarm start.