Hyundai India fends off the scare as the IPO was booked 2.37 times in the last day but the GMP fell to 0

The categories reserved for retail and non-institutional investors were not fully subscribed, mainly due to concerns over high pricing. The retail segment received 50% subscription and the non-institutional investor portion recorded a response of 60%.

The QIB portion of the Rs 27,870 crore issue was booked 6.97 times.

Even as the IPO closed for bidding, the company’s GMP in the gray market fell to Rs 0, continuing the downward trend seen in the last few days.

There is near consensus among analysts that participating in Hyundai’s IPO will be of great benefit to long-term investors in the growing passenger car market as consumers increasingly prefer larger and higher quality cars.

As many as 10 analysts advised investors to subscribe to the IPO for the long term. However, the premium PE valuation of 26x FY25 earnings means short-term investors may be in for a disappointment given the current GMP and valuation discussions. Hyundai has a history of ensuring that the stock market in India remained stable. The company enjoys loyalty among the Indian consumer base due to its seamless and affordable customer service.

Equipped with research and development from Korea and an automated factory in Chennai, the company has been able to optimize its operations while expanding its distribution. The automaker also plans to gradually become a major player in the EV segment.

“We believe the company can benefit from the PV market in India with its diverse offerings. We have created a long-term rating subscription for the issue,” said Arihant Capital.

The issue was entirely an offer for sale (OFS) of 14.2 crore shares made by the company’s parent company, Hyundai Motor Global. Since the IPO is an OFS, all proceeds go to the selling shareholder.

Although all proceeds from the IPO will go to the parent company, management said the funds will be used for research and development and new innovative offerings.