Hyundai India IPO debuts weak, shares slip 1.5% below issue price
Hyundai Motor India's shares listed at a discount on the NSE, marking a weak debut despite a recent upswing in the Indian equities market. This IPO, Hyundai's first outside South Korea, follows other large, discounted IPOs like LIC and Paytm.
FollowHyundai Motor India shares made a weak debut on the exchanges on October 22 after listing at 1.32 per cent discount at Rs 1,934 against its initial public offer (IPO) price Rs 1960 on the NSE. Hyundai Motor Co. of South Korea's Indian subsidiary was valued at around $19 billion during the IPO. In the transaction, the parent company sold a 17.5% share in the second-largest automaker in India.
Hyundai Motor's IPO in Mumbai on Tuesday marks the company's first foray outside of its native South Korea, and it coincides with a significant upswing in the Indian equities markets.
Although the IPO was listed more than twice, driven primarily by institutional investors, market participation was lackluster due to price concerns. The listing marked Hyundai's first IPO debut outside South Korea and comes amid a bullish trend in India's equity markets.
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With a 15% market share, Hyundai is now the second-largest carmaker in India. Analysts expressed worries over its value despite its most recent initial public offering. The company's valuation is 26 times its FY2024 profits, which is 29 times that of market leader Maruti Suzuki.
Hyundai's minimal exposure to hybrids and electric cars (EVs), which make up just 11% of its current portfolio, has sparked questions about its capacity to compete in a market that is increasingly adopting EVs. Operational challenges have also tempered excitement, including limited manufacturing capacity and a dearth of recent model introductions.
Prior major initial public offerings (IPOs), including those of Life Insurance Corporation and One97 Communications, the parent company of Paytm, have encountered difficult business obstacles initially, highlighting the trend of larger membership declines.
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While the IPO may not have delivered an immediate boost, Hyundai’s strong market fundamentals suggest that patient investors could still see gains in the future.
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