Hyundai IPO : The Hyundai IPO has witnessed a significant shift in investor sentiment, as the Grey Market Premium (GMP) saw a notable rise to 5%, following an earlier drop to -3%. This reversal suggests a more optimistic outlook from investors, hinting at a potentially favorable listing for Hyundai when it debuts on the stock exchanges on October 22, as reported by The Economic Times.
In the grey market, Hyundai’s shares are currently trading at Rs 2,067, reflecting a premium of 5% (around Rs 101-107) over the issue price of Rs 1,960. If this upward momentum continues, Hyundai’s stock (Hyundai IPO) is expected to open with a gain upon listing.
It is important to remember that grey market premiums are inherently volatile and serve primarily as an indicator of demand in the unlisted space. Fluctuations can occur rapidly, and GMP trends should be interpreted with caution.
Hyundai IPO : Attracting Attention from Non-Institutional Investors
Valued at Rs 27,870 crore, Hyundai’s IPO is the largest ever in India. Initial demand was subdued, with full subscription only achieved on the final day of the offering, largely due to strong participation from non-institutional investors. However, retail and institutional investors showed less enthusiasm, which contributed to the slow start. The recent GMP improvement, however, signals increasing confidence in the stock.
Market experts are optimistic about Hyundai’s prospects, particularly for long-term investors, as the Indian passenger vehicle (PV) market continues to expand, with a growing consumer preference for larger and more premium vehicles. Despite the lower subscription figures from certain investor segments, many analysts are confident that the Hyundai IPO could be a solid long-term investment.
High Valuation Presents Caution for Short-Term Investors
While long-term prospects seem promising, short-term investors might approach with caution. Hyundai IPO is priced at a price-to-earnings (P/E) ratio of 26 times its projected FY25 earnings, which some see as relatively high, despite the improved sentiment in the grey market.
Stable Market Share and EV Ambitions
Hyundai has consistently retained a strong market share in India, largely owing to its focus on customer loyalty and affordable after-sales services. With ongoing R&D support from its Korean parent company and an automated manufacturing facility in Chennai, Hyundai has streamlined operations while expanding its distribution channels. The company has also set its sights on becoming a major player in the electric vehicle (EV) segment in the coming years.
“We believe Hyundai is well-positioned to capitalize on the Indian PV market, given its diversified product lineup. We recommend subscribing to the IPO for long-term gains,” stated Arihant Capital.
Offer for Sale (OFS)
Hyundai IPO is an Offer for Sale (OFS) of 14.2 crore shares, being divested by Hyundai Motor Global, the parent company. Since this is an OFS, all proceeds from the IPO will go to the selling shareholder. Despite this, the management has indicated that the funds will be reinvested in research and development as well as in driving new, innovative products.
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