Hyundai Motor India Ltd., part of the South Korean auto giant Hyundai Motor Global, made its highly anticipated stock market debut on Tuesday, October 22, 2024. The IPO, which is India's largest to date, was listed at a discount of 1.33% on the NSE, at ₹1,934 per share, compared to its issue price of ₹1,960. On the BSE, the stock saw a similar dip, opening at ₹1,931, down 1.47%.
Ahead of the listing, Hyundai Motor India's grey market premium (GMP) had dropped to 2%, indicating a trading premium of ₹48. This was a significant decrease from the earlier GMP of 5%, highlighting fluctuating investor sentiment.
Despite the lackluster debut, analysts remain optimistic about Hyundai Motor India’s long-term prospects. Shivani Nyati, of Swastika Investmart, emphasized that while the IPO valuation appears fully priced and the listing gains may be modest, the company’s strong fundamentals make it a solid investment for long-term investors. She highlighted that the IPO is entirely an Offer for Sale (OFS), meaning Hyundai Motor India will not directly benefit from the proceeds.
Nyati advised investors with a long-term view to hold on to their shares and weather the initial volatility. She expects that as market conditions stabilize and the company continues its growth, the stock will yield strong returns.
Sagar Shetty, a research analyst at StoxBox, echoed this sentiment. He recommended that those who were allocated shares in the IPO should hold their position and monitor Hyundai’s performance in the upcoming quarters. Similarly, Prashanth Tapse from Mehta Equities advised against expecting quick profits, citing short-term volatility in the sector but reaffirmed Hyundai’s long-term growth potential.
Hyundai Motor India's IPO raised a staggering ₹27,870 crore, surpassing the previous record set by LIC’s ₹21,000 crore IPO. The shares were sold in a price band of ₹1,865-1,960 per share, with the entire offering being an OFS of 14.2 crore shares by the parent company, Hyundai Motor Global.
Hyundai Motor India is the second-largest original equipment manufacturer (OEM) in India and ranks as the second-largest exporter of passenger vehicles. The company holds a domestic market share of 14.6%. However, it faced a 10% decline in sales in September 2024, compared to the same period last year. For the year so far, Hyundai has sold 5.77 lakh units, showing flat growth.
For those who were not allocated shares during the IPO, analysts recommend a wait-and-watch approach, suggesting potential investors re-enter the market when better discounted opportunities arise. Hyundai’s strong position in the automotive market, especially its SUV lineup, continues to make it an appealing long-term investment as the company capitalizes on India’s broader economic growth.
Though Hyundai Motor India's IPO debut was subdued, analysts continue to recommend the stock for long-term investors. With the company’s solid market position and growth prospects, it remains an attractive option for those willing to ride out short-term market volatility.
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