Hyundai Motor India has officially launched its highly anticipated Initial Public Offering (IPO), which is set to be one of the largest in Indian history. As of day two of the subscription period, the IPO has garnered significant attention from investors, with various factors influencing its market performance.
Hyundai Motor India IPO Overview
Hyundai Motor India’s IPO opened for subscription on October 15, 2024, and will remain available until October 17, 2024. The price band for the IPO is set between ₹1,865 and ₹1,960 per equity share, aiming to raise approximately ₹27,870.16 crore through an entirely Offer for Sale (OFS) mechanism. This means that the proceeds from the sale will not benefit the company directly but rather its existing shareholders.
Current Subscription Status
As of October 16, 2024, the Hyundai Motor India IPO has been subscribed at a rate of 21% by 10:30 AM IST. The retail investor segment shows a stronger interest with a subscription rate of 31%, while non-institutional investors have subscribed at 16%. Qualified Institutional Buyers (QIBs) are lagging behind with only a 5% subscription rate. The employee portion has seen remarkable interest, with a 99% subscription rate.
Grey Market Premium (Hyundai Motor India IPO GMP)
The grey market premium (GMP) for Hyundai Motor India shares currently stands at ₹65, indicating a positive outlook among investors in the unofficial market. This premium reflects the expected listing gains when shares start trading on stock exchanges. However, analysts caution that GMP can fluctuate significantly and should not be the sole basis for investment decisions.
Analyst Reviews and Recommendations
Market analysts have generally assigned a ‘subscribe’ rating to this IPO. Gaurav Garg from Lemonn Markets highlights Hyundai’s operational efficiency and strong financial performance as key reasons to consider investing. The company has demonstrated a revenue compound annual growth rate (CAGR) of 19.4% from FY21 to FY24 and boasts an impressive return on capital employed (RoCE) exceeding 50% in FY24.Shivani Nyati from Swastika Investment advises potential investors to consider applying for the IPO with a long-term perspective, despite acknowledging that the offering is fully priced and may limit immediate upside potential. Other firms like Master Capital also recommend investing in Hyundai’s IPO due to its strong market position and plans for expansion in electric vehicles.
Should You Apply?
Given the current subscription rates and GMP, potential investors should weigh their options carefully. While Hyundai Motor India presents a compelling investment opportunity based on its strong fundamentals and market presence, it is crucial to consider the implications of an OFS structure where no funds flow directly into the company’s operations.Investors looking for long-term growth may find this IPO appealing; however, those seeking immediate gains might want to exercise caution given the current market conditions and subscription dynamics.Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions regarding the Hyundai Motor India IPO.
