Hyundai Motor India Faces Lackluster Market Debut with Shares Listing Below Issue Price

Hyundai Motor India made a disappointing entrance into the stock market, listing at a 1.3% discount on the National Stock Exchange (NSE) with an opening price of ₹1,934, compared to an issue price of ₹1,960. On the Bombay Stock Exchange (BSE), shares debuted at ₹1,931, reflecting a discount of 1.48%.

Despite the shares showing a premium of 2.4% in the grey market prior to listing—suggesting potential gains—the premium had steadily declined as the IPO approached. The grey market operates unofficially to trade shares before they officially list.

IPO Details and Performance

Hyundai Motor India set its IPO price band between ₹1,865 and ₹1,960 per share. The IPO was open for subscription from October 15 to October 17, raising ₹27,870 crore through an offer for sale of 14.22 crore shares.

The final share allotment was completed on October 18, managed by Kfin Technologies. The IPO was oversubscribed 2.37 times overall, driven primarily by strong interest from qualified institutional buyers (QIBs), who subscribed nearly 7 times. Retail investors, however, showed less enthusiasm, subscribing only 0.50 times, while non-institutional investors (NIIs) subscribed at 0.6 times. The employee segment saw a subscription rate of 1.74 times, with around 778,400 shares reserved for employees at a discount of ₹186.

Expert Insights

Experts attribute the subdued response from retail and NII investors to several factors, including concerns about high valuations compared to industry peers and the all-offer-for-sale (OFS) nature of the IPO, which left little opportunity for new investors. Additionally, worries about high inventory levels and declining demand in the automotive sector over the past few months contributed to the cautious sentiment.

Prashanth Tapse, Senior Vice President of Research at Mehta Equities, noted, “Given the sluggish under-subscription from retail and NII investors, alongside market concerns over valuation and sector oversupply, a flat to negative debut was highly likely.”

Book Runners

The lead book runners for Hyundai’s IPO include Kotak Mahindra Capital Company, Citigroup Global Markets India, HSBC Securities & Capital Markets, J.P. Morgan India, and Morgan Stanley India Company.