Hyundai Motor India falls 3% post listing: Should you buy, sell or hold?

Shares of Hyundai Motor India, the country’s second-largest automobile player, made a negative debut on the stock exchanges and continue to trade lower. At around 10:17 am, soon after their debut, Hyundai Motor India shares were quoted at Rs 1,871 on the National Stock Exchange (NSE), down 3.26 per cent from its IPO issue price of Rs 1,960. A combined total of nearly 13.88 million shares of Hyundai Motor India exchanged hands on both NSE and BSE.

Earlier today, following the completion of their IPO process, Hyundai Motor India shares listed at Rs 1,931 on the BSE, marking a 1.47 per cent discount to its issue price of Rs 1,960 per share. On the NSE, Hyundai Motor India shares debuted at Rs 1,934, reflecting a 1.32 per cent discount to its IPO price.

Market analysts remain cautious on Hyundai Motor India, recommending profit booking and re-entry at lower levels, citing market volatility and the company's disappointing listing. 

Should you buy, sell or hold?

Hyundai Motor India, as per Sudip Bandyopadhyay, group chairman of Inditrade Capital, is a long-term play, and investors who hold the shares now can benefit later, given that auto companies have provided excellent returns in the past. The biggest example is Maruti Suzuki. Bandyopadhyay, however, said, "There is no rush for investors who want to buy. Once the stock settles, buying opportunities may arise."
 

Ambareesh Baliga, independent analyst, said, "There is no scope for an upward move from here for Hyundai Motor India shares" and advised investors not to buy the stock post-listing. "Investors who have applied for Hyundai Motor India IPO can book profit," said Baliga.

Baliga recommended that investors who want to buy the stock can only do so after a major correction. He suggests Rs 1,500/1,550 per share as buying levels.
 

Vikas Sethi, managing director of Sethi Finmart, on the other hand, recommended that long-term investors 'Hold' Hyundai Motor India shares. "However, short-term investors should 'Sell' amid market volatility as they will incur a small loss now," said Sethi. 

Sethi further added that if the stock reaches Rs 1,500 to Rs 1,600 levels, one can buy again.

Astha Jain, Senior Research Analyst at Hem Securities, said that the listing of Hyundai Motor India was in line with predictions and suggested that investors who have been allotted the shares should 'Hold' for at least 5-6 months for positive gains. "If someone wants to 'Buy,' they can do so around Rs 1,800 to Rs 1,850 per share. Short-term investors should switch to a long-term view if they want positive returns," said Jain.

Jain further pointed out that, historically, we have seen that large IPOs do not always generate positive returns, similar to Hyundai Motor India's listing. Additional factors, according to Jain, that contributed to the decline in the stock were market volatility, a slowdown in auto numbers, and somewhat stretched IPO valuations.

Following a projected moderation in FY25, analysts at Motilal Oswal Securities anticipate the company to report 17 per cent EPS CAGR over FY25-27. They have initiated coverage on Hyundai Motor stock with a BUY rating and a target price of Rs 2,345, premised on 27x September 2026E earnings (vs. 26x for MSIL).

"We ascribe a slight premium to HMI over Maruti Suzuki (MSIL), given: 1) HMC’s technological prowess in emerging technologies that can be adapted to domestic requirements; 2) superior financial metrics; 3) a relatively premium brand perception; and 4) better alignment with industry trends," their analysts wrote in a post listing note.

About Hyundai Motor India
Hyundai Motor India, a subsidiary of Hyundai Motor Company, is the world's third-largest auto OEM by passenger vehicle sales. In India, it has been the second-largest passenger vehicle manufacturer since 2009. The company produces innovative, feature-packed four-wheelers, transmissions, and engines, utilising cutting-edge technology.