Hyundai Motor India shares make poor start on bourses: List at 1% discount

On the National Stock Exchange (NSE), Hyundai Motor India listed at Rs1,934, reflecting a 1.32 per cent discount over its IPO price

Shares of Hyundai Motor India, the country’s second-largest automobile player, made a negative debut on the stock exchanges. The company's 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 National Stock Exchange (NSE), Hyundai Motor India shares debuted at Rs 1,934, reflecting a 1.32 per cent discount to its IPO price.

Meanwhile, the grey market premium (GMP) of Hyundai Motor India's unlisted shares has remained volatile ahead of their listing. Sources tracking grey market activities reveal that Hyundai Motor India shares were commanding a premium of Rs 48, translating to a 2.45 per cent GMP against the IPO issue price of Rs 1,960. 

"The subdued grey market premium (GMP) ahead of listing had already indicated limited enthusiasm for listing gains, and the company's fully priced valuation contributed to the muted debut," said Shivani Nyati, Head of Wealth at Swastika Investmart.

Nyati, however, believes that despite the discounted listing, Hyundai Motor India's strong fundamentals - being India's second-largest passenger vehicle manufacturer and its strategic focus on the SUV segment - continue to support its long-term growth prospects.

"Investors who entered with a long-term perspective may consider holding the stock, as future performance will likely be driven by the company's competitive market position and product innovations," Nyati added.

The Hyundai Motor India IPO, which was the largest-ever public issue in Indian markets, comprised an offer for sale, with Hyundai Korea divesting 142,194,700 shares to raise up to Rs 27,870.16 crore. The public issue, which closed for subscription on Thursday, October 17, 2024, was oversubscribed 2.37 times by the last date, driven largely by qualified institutional buyers (QIBs), who placed the highest bids, subscribing 6.97 times, as per NSE data.

The basis for the allotment of Hyundai Motor IPO shares was finalised on Friday, October 18, 2024. Hyundai Motor India, in the Red Herring Prospectus (RHP), stated that the objectives of the offer are to carry out the offer for sale by the promoter (Hyundai Motor) and to achieve the benefits of listing the equity shares on the stock exchanges. Hyundai Motor India will not receive any proceeds from the offer.

Hyundai Motor India

Hyundai Motor India (HMIL) is a wholly owned subsidiary of the South Korean automaker Hyundai Motor Company (HMC). The company is the third-largest auto original equipment manufacturer (OEM) in the world based on passenger vehicle sales in CY2023, according to the CRISIL Report. Hyundai Motor India has been the second-largest auto OEM in the Indian passenger vehicles market since fiscal 2009 (in terms of domestic sales volumes), according to the CRISIL Report. HMIL produces and sells dependable, feature-packed, and innovative four-wheeler passenger vehicles, utilising the latest technology. They also manufacture components such as transmissions and engines.